Authorities say destructive winds and very rough to phenomenal seas with heavy swells will affect Torba and Sanma.
Cyclone Donna was forecast to make landfall overnight in Torba and Penama provinces.
At 2am local time, Donna was about 80 kilometres north notheast of Torres and 155 kilometres north northwest of Vanua Lava.
The system was moving in a west southwest direction at 18 kilometres.
Meanwhile, according to the Joint Typhoon Warning Centre in Hawaii, global forecast data suggests the system was likely to undergo a period of rapid intensification.
"The cyclone could reach a severe category 4 system with very destructive wind gusts as high as 260km/hour," the Joint Typhoon Warning Centre warned.
Advice from officials in Vanuatu
The authorities are warning people there to prepare by securing their homes and valuables, cutting down dangerous trees, organising food and water, and having torches, charged phones and an evacuation kit ready.
The Vanuatu National Disaster Management Office advises people that Red Alert was now current for Torba province, Yellow Alert was now current for Sanma province.
People are being advised to take extra precautions for possible flash flooding; especially areas close to river banks and in low lying areas, and to remain indoors where thunderstorm activities are happening.
Coastal flooding was also expected.
Torba and Sanma and Penama, Malampa and Shefa should listen to all Radio Outlets to get the latest information on this severe system.
Photo: Supplied/Vanuatu Meteorology & Geo-Hazards Dept (Satellite image of Tropical Cyclone Donna at 1600 UTC )