Iceland has issued a red alert to the aviation industry for the Bardarbunga volcano, meaning significant ash emissions are likely.
The Icelandic Met Office has warned that a small sub-glacial eruption is under way at Bardarbunga.
On Wednesday, authorities evacuated an area close to the volcano over fears it could erupt.
Iceland's Eyjafjallajokull volcano erupted in 2010, producing an ash cloud that severely disrupted air travel.
The red alert is the highest warning on the country's five-point scale.
Bardarbunga is part of a large volcano system hidden beneath the 500-metre (0.31-mile) thick Vatnajokull glacier in central Iceland.
Wednesday's evacuation of several hundred people north of Vatnajokull came after geologists said about 300 earthquakes had been detected in the area since midnight on Tuesday.