The system began as a tropical low in the Coral Sea earlier this week but officially became a category one cyclone this afternoon.
The Bureau of Meteorology is warning residents to prepare for damaging wind gusts, heavy rain, which may cause flash flooding, and damaging waves from a dangerous storm tide.
Dylan is expected to come ashore at about 4am EST on Friday between Townsville and Ayr but its impact will stretch south as far Gladstone in central Queensland. A map showing the track of the cyclone is available here.
Earlier, hundreds of Townsville homeowners watched in despair as a king tide swamped low-lying suburbs.
Flights north Queensland have been cancelled.
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