Indonesia will extend the closure of Bali's international airport to Thursday due to ash from a nearby erupting volcano, officials said Wednesday, grounding hundreds of flights.

Authorities had closed the Ngurah Rai International Airport on the resort island late Tuesday due to a large ash cloud drifting from Mount Rinjani, an active volcano on the nearby island of Lombok.

Two smaller airports on Lombok island and East Java were also shut.

"The (Bali) airport remains closed until 8.45 am (0045 GMT) tomorrow (Thursday). The wind has blown the volcanic ash towards Bali in such a way that it covers the sky around the airport, making conditions unsuitable for flying," Bali airport official Yulfiadi told AFP.

Airport manager Trikora Harjo said 692 flights, including 320 international ones, were cancelled between Tuesday and Thursday. Yulfiadi said 106 were scrapped on Wednesday alone.

Australian airlines Virgin Australia and Jetstar cancelled all Tuesday flights, deeming conditions unsafe for flying, with Virgin also scrapping its roster for Wednesday.

Thousands of stranded tourists were seen sleeping and sitting around at the airport, but Harjo said "everything's going smoothly".

National Disaster Management Agency spokesman Sutopo Purwo Nugroho said the wind was blowing the ash in the westerly direction towards Bali.

"Seismic activity and eruptions of the volcano continue at a higher intensity," he said.

"There was an eruption this morning, where the volcano spewed ash 1,500 metres to the sky," he added.

Ash from a different volcano -- Mount Raung on Indonesia's main island of Java -- stranded thousands of passengers on Bali for days during the peak holiday season in July.

Air traffic is regularly disrupted by volcanic eruptions in Indonesia, which sits on a belt of seismic activity running around the basin of the Pacific Ocean and is home to the highest number of active volcanoes in the world, around 130.

The main concern for airlines regarding volcanic ash is not that it can affect visibility but rather that it could damage jet engines, according to experts.

Ash turns into molten glass when it is sucked into aircraft engines and in extreme cases can cause them to shut down.

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