Wild weather battered Australia Sunday, with a tropical cyclone closing in on the north as tornadoes and thunderstorms brought hail in the south and huge swells forced the closure of popular beaches.

Tropical Cyclone Grant intensified to a category two storm off the Tiwi Islands north of Darwin, packing destructive winds of 130 kilometres (80 miles) and forcing Christmas revellers into lockdown.

The weather bureau said Grant was "slowly intensifying" and advised residents in the cyclone's path to take shelter, with gales and heavy weather closing in as the storm inched toward the mainland.

It came as ex-tropical cyclone Fina whipped up huge four-metre (13 foot) waves on the popular northeast coast, creating dangerous surf conditions which forced tourist beaches to close.

Planes were diverted and delayed at Melbourne after thunderstorms, hail and a tornado swept through the southern city, Australia's second-biggest, smashing skylights and car windscreens.

The windstorm swept through at Keilor Downs, northwest of the city, according to the State Emergency Service (SES).

"There was a tornado reported at Fiskville and we know it touched down at Keilor Downs because we had some SES volunteers there and they had to run for shelter," said SES spokesman Lachlan Quick.

Conditions were fine in Sydney, recently hit by unseasonably cool and wet weather, with thousands of tourists flocking to the city's iconic beaches to catch a rare sunburst for the Christmas holiday.

Roger Butler, a lifeguard at renowned Bondi Beach, estimated between 8,000-10,000 people had hit the famous sands to celebrate the holiday.

"Generally it's a pretty relaxed family atmosphere on Christmas day," Butler told AFP.

Cyclone Grant is expected to dissipate over the islands off northern Australia as it skirts across land before regaining strength over the warm waters of the Van Diemen Gulf and crossing back onto the coast mid-Monday.

Northern Australia was savaged by a top-level cyclone earlier this year which flattened key agricultural areas, almost immediately after record flooding devastated the region, swamping coal mines and destroying homes.

There is a strong chance that much of Australia's east will have heavy rainfall over the next few months because of a La Nina weather pattern in the Pacific Ocean, according to the weather bureau.

La Nina is characterised by unusually cool ocean temperatures in the eastern equatorial Pacific and has been associated with strong rainfall in Asia and Australia.