Fiji's MetService said the category four storm was very close to being upgraded to the highest category, five.
It had already washed out building and equipment of Tonga's met office, and Fiji weather forecasters took over issuing warnings for the region from shortly before midnight.
The storm was expected to be upgraded to a category five in the early hours of the morning.
The US Joint Typhoon Warning Centre earlier said it was hitting maximum sustained winds estimated at 233km/h.
Well-built framed homes can be damaged in category four winds, and most trees will be either snapped or uprooted and electricity and water outages could last anywhere from several days to weeks after the storm.
The local radio station is also disabled.
There are reports of very high winds in the capital Nuku'alofa.
The Fiji met service reported the cyclone was 30km south south east of Tongatapu at 11pm and moving west northwest about 30km an hour away from Tonga.
Authorities have switched off the electricity for about 75,000 residents who live on the island.
The Tongan Red Cross communications advisor Poli Kefu earlier said several houses had already been destroyed in Tonga.
Mr Kefu said there were more than 60 people hunkered down in its office. He said it was very dark outside and everyone was feeling scared.
Tonga Police urged people to stay close to loved ones.
"Prayers going out to everyone in Tonga. The wind is intensifying and growing louder, stronger and scarier."
TVNZ's Pacific correspondent Barbara Dreaver, in Nuku'alofa, earlier said rain was pouring "sideways" into the second floor of her hotel room, which was shaking, and she could "hear the screech of metal flying outside".
"Officials are saying this is actually going to be the worst cyclone on record in Tonga," she said.
The houses were not built to last.
"They're certainly not structurally sound ... A lot of them are shacks ... there's sort of been an air of complacency amongst many because it's been a little bit of a blow, a bit of rain, but it's fairly calm out there," she said.
Hundreds of calls for help
Graham Kenna, from Tonga's National Emergency Office, said it had been a rough night.
"There's a lot of damage in the city. We know that one of the Catholic churches is completely gone and others are damaged. We've had hundreds of calls during the night for assistance required for trees down on houses and people trapped in houses."
He said it had been too dangerous to get out and a lot of debris was lying in the streets of the capital.
He said roof sheets had been flying, smashing into cars, houses and office buildings.
Mr Kenna said a curfew was expected to remain in place tomorrow.
He said staff of the National Emergency Management Office would get out as soon as possible to free trapped people, look at the damage and do assessments in order to distribute aid.
About 1000 families heeded the warnings and took shelter in evacuation centres early yesterday afternoon.
"I've had phone calls through the night from people who were trapped and wanted help and we just weren't able to offer. We couldn't put lives at stake to go out in such atrocious weather."
Mr Kenna said the New Zealand and Australian governments had emergency supplies on standby and emergency funds were available.
"We can hit the ground running. We're just dividing up our teams now so that as soon as we can get out there, we're out doing an assessment.
"We'll start in the city and then we'll fan out into the countryside and get a full grasp by mid afternoon on what the needs are going to be," Mr Kenna said.