The development came as merchants boarded up shop windows along Hilo Bay and shoppers snatched supplies of food and water from grocery store shelves after initially being told the island could be hit by its first hurricane in a quarter-century.
The National Weather Service downgraded the alert to a tropical storm warning as Madeline was about 150km southeast of Hilo and packing 120 kph winds.
Residents were still advised to take precautions to protect themselves and their property.
``It doesn't matter if it's a strong tropical storm or a category 1 hurricane,'' said Eric Lau, a meteorologist with the weather service ... it's still a strong storm, so residents still need to be prepared.''
The centre of the storm is not expected to make landfall on any Hawaiian island.
Surf was building, and the waves outside Hilo Harbor were about three and a half metres high, Hawaii County Civil Defense Director Ed Teixeira said.
``Hopefully our roofs stay on, and our houses don't float way or get blown away,'' Big Island resident Mitzi Bettencourt said as she covered walls of glass windows while the island was under the hurricane warning. ``It's like, `Oh my God, are we going to get flattened or what?'''
Meanwhile, Hurricane Lester was over 1600km from Hawaii and expected to drop to a tropical storm by Sunday.
Elsewhere, the National Hurricane Center said Tropical Storm Hermine had formed in the Gulf of Mexico and was centered about 560km from Tampa, Florida. It was expected to pick up speed and approach the northwest Florida coast on Thursday night. A warning was dropped about a tropical depression that had been moving toward North Carolina.
In Hawaii, Peggy Beckett, a retiree and beekeeper, stopped at a Hilo supermarket to pick up onion bagels, cheese, cold cuts and salad to add to her canned food at home. She also has a cooler with ice plus a portable burner and batteries to get her through the storm.
Noting the lines of people at the market, Beckett said people were getting prepared but weren't panicking.
``There's always a lot of disbelief on the island that the storms will really be as big and bad as forecast,'' she said, noting that she and her partner had taken precautions to protect their beehives.
Bettencourt manages several holiday rental properties, and her own home sits a few blocks from the ocean. She and her neighbours were stocking their pantries, stowing lawn furniture and preparing for power outages.
Employees boarded up windows at Hulakai Store, a surf shop in Hilo. ``We'll probably keep it up till Sunday, waiting for the second one to come through,'' said supervisor Renee Balanga.
Governor David Ige has issued an emergency proclamation for both storms, allowing the state to quickly spend money. Big Island schools were closed and about a dozen facilities were outfitted as emergency shelters.
President Barack Obama is scheduled to visit Oahu this week. The White House was tracking the weather but didn't anticipate changing Obama's schedule.
The Hawaiian islands of Maui, Molokai, Lanai and Kahoolawe were under a tropical storm watch, but there were no alerts for Oahu or Kauai.
On the Big Island, Hawaii Volcanoes National Park was closed.
The US Coast Guard asked crews of barges and ships to prepare to leave Hilo Harbor and told ocean-going vessels to seek sheltered waters until storm conditions subside.
Source: AAP