A "severe" cyclone packing winds of up to 125 kilometres an hour closed in on India's southeast coast Wednesday as thousands of residents evacuated their homes fearing major storm damage.

Cyclone Laila was set to slam into the state of Andhra Pradesh on Thursday morning, with forecasters warning of a sea surge and disrupted power and communication lines.

As heavy rains and strong gales battered the coast on Wednesday, state authorities evacuated residents from low-lying areas and emergency teams were put on stand-by.

The cyclone, positioned 150 kilometres (90 miles) east of Chennai in the Bay of Bengal, was "severe" and would strengthen before hitting the coast near the city of Machilipatnam, the Indian Meteorological Department said.

"We have passed on information to state authorities to warn fishermen not to go out into the sea and to evacuate people from low-lying coastal areas. This is being done," V. Prasad Rao, a weather official in Andhra Pradesh, told AFP.

The weather department in its latest warning said a "storm surge" of up to two metres (six and a half feet) above the regular tide was likely to inundate parts of coastal Andhra Pradesh.

It also warned of "high to phenomenal" sea conditions.

"The focus is on evacuation now. People are advised to keep important documents and valuables ready and be prepared to move to shelters at short notice," said Marri Sashidhar Reddy, an official at the National Disaster Management Authority.

Dinakar Babu, a senior state disaster official, said that besides existing cyclone shelters, schools and community halls had been identified to serve as potential relief camps to evacuees.

Some people had already evacuated their homes and authorities were preparing helicopters and boats for relief work, he added.

An official source at Reliance Industries, which operates India's biggest gas field off the Andhra Pradesh coast, said the company had halted crude oil output in the Bay of Bengal.

He said gas production was continuing but that the company was on alert and carefully monitoring the cyclone's path.

The impact of the weather system was also felt in Tamil Nadu state -- just south of Andhra Pradesh -- with heavy rains and gale-force winds.

At least one fisherman died in Tamil Nadu, the Press Trust of India news agency reported. The 52-year-old man drowned while trying to retrieve his boat, which had broken free of its moorings.

India and Bangladesh are hit regularly by cyclones that develop in the Bay of Bengal between April and November, causing widespread damage to homes and fields.

Last May, Cyclone Aila tore through southern Bangladesh killing 300 people and destroyed 4,000 kilometres of roads and river embankments, leading to major flooding.

About 200,000 people were made homeless and many remain in temporary shelters.