Damaging gale force winds and flooding are also expected.
The National Disaster Management Office has identified evacuation centres in Port Vila but on other parts of Efate and the offshore islands, the office was looking to use church buildings for this purpose.
Radio Vanuatu was forced offline following a power cut.
On Tuesday, damaging gale-force winds affected the northern provinces of Torba, Sanma, Penama and Malampa.
The cyclone is bearing down on Vanuatu’s northern provinces, moving in a southerly direction.
Red alerts are in place for Penama, Malampa, Shefa and Tafea.
Vanuatu Metservice forecasts destructive hurricane force winds of 150km/h - gusting to 200km/h - will affect the central and southern islands. Destructive storm force winds of 110km/h, gusting to 150km/h, will affect 80 nautical miles north-east and south-east from the centre of the system.
It said Cyclone Judy was close to the capital Port Vila.
Air Vanuatu has cancelled all domestic and international flights, with flights expected to resume on Wednesday.
Banks closed their doors early and sent staff home, while boarding schools in the capital have also sent students home.
Commercial ships were urged by Port and Marine Departments to find safe anchorage after the met service issued a high seas warning for open coastal waters of Vanuatu.
Port Vila was severely damaged by Cyclone Pam in 2015 which was a category five cyclone.
Getting ready on New Caledonia
The Meteorological Service in New Caledonia has activated its pre-cyclone alerts as Cyclone Judy makes its way south.
The population is advised to gather essential items and to secure boats properly.
The storm is expected to be about 230km off the island of Mare in the Loyalty Islands by Wednesday night.
Swells of up to 4 metres are expected to hit the north-east coast of the island group on Thursday.
Another tropical depression is currently forming south of Papua New Guinea and is expected to intensify into a Cyclone Category one in the following few days.
