Residents are being urged to be prepared, clear their guttering and stay off the roads in the event Cyclone Hola brings strong winds and heavy rain to the city.
Tropical Cyclone Hola has rapidly intensified and could reach Category 5 tomorrow , with winds up to 300km/h as it batters Vanuatu, then heads for New Zealand.
Three forecasting models for Tropical Cyclone Hola predict the storm is likely to hit the North Island early next week.
Two models, from the UK's Met Office, show Hola could hit Rotorua and the wider Bay of Plenty on Monday.
It would be the third cyclone this season to affect New Zealand.
The third model, from the European Centre for Medium-Range Weather Forecasts, predicts it could make landfall about 6pm on Monday.
The Fiji Meteorological Service upgraded the cyclone to Category 4 this morning , warning of sustained winds of 170km/h.
MetService New Zealand lead meteorologist Mark Todd said computer models were still struggling to give an accurate track but it was looking increasingly likely the storm would affect New Zealand.
"If we are lucky it will pass just to the north of us. If we are unlucky, it could be a direct hit into the North Island.
"If it does make a direct hit there will be heavy rain and high winds."
Rotorua Lakes Council primary civil defence emergency management controller Stavros Michael said the council continuously monitored developing weather patterns.
He said this had changed in the past year as Rotorua had experienced more severe weather events, such as thunderstorms and heavy rain.
"At present we are keeping a watchful eye on the progression and movements of Cyclone Hola.
"Like any severe weather event which may possibly descend on Rotorua, we encourage residents to prepare just in case and remind them to avoid non-essential driving and ensure drains and spouting around your home are clear."
He said the warning was also a chance for residents to check their emergency supplies to ensure they had fresh water, food and medication, as well as resources just in case there was a power outage.
Reports of flooding, slips or fallen trees can be reported to the council by calling (07) 348 4199.
Michael said when severe weather was expected for the district, staff remained on standby and activated preparedness measures including monitoring inflows to the Wastewater Treatment Plant and notifying contractors about the approaching weather.