Shocking footage shows the eruption at the Sundhjuka crater illuminate the wintry night sky with explosions of magma.
Following the quake local police have warned residents to not go near the area.
Iceland Police said in a statement: “An eruption has begun. We ask people not to be in front of the responders and not to go in the direction of the eruption. It is important that roads and other things are as accessible as possible.”
The volcano was hit with a series of earthquakes at 9pm Monday evening, with unverified data indicating that the largest tremour measured a magnitude 4.2. However, a coastguard helicopter will be in the air shortly to confirm the exact location and size of the eruption.
Icelandic volcanologist Thorvaldur Thordarson the plumes of magma have reached highs of 150m, before calling it the “worst case imaginable”.
He said: “This is the worst place, it looks like it. West of the pasture and up there, and then probably up through the Sundhnúkar crater row, which are just north of it.
“There are super-high plumes of magma. Now it’s a total guess, but the highest plumes are probably 150 metres. This means that the lava is flowing very quickly from the crater
“This may be close to the worst case imaginable. Unfortunately.”
Reykjavik’s international airport, which is only 17miles away from the eruption, remained open. In a statement the airport said: “At the moment, there are no disruptions to arrivals or departures at Keflavík Airport.
However, earlier scientists said a new eruption would likely produce lava but not an ash cloud.