Bali's Mount Agung volcano could erupt at any moment for the first time in 54 years, with the warning level upgraded to the highest possible level at 8.30pm on Friday, local time.

People have been told to evacuate from within a nine to 12 kilometre radius of the summit after smoke was seen rising 100 metres from the summit.

A man observes the Mount Agung with binoculars at a viewing point in Bali, Indonesia. Credit:AP

The airport is still operating but a series of tremors increasing in intensity has shaken the area surrounding Mount Agung since Friday morning, with more than 10,000 residents choosing to evacuate.

The volcano, which is is located in eastern Indonesia, about 71 kilometres from the tourist destination Kuta, last erupted in 1963, killing 1100 people.