Update: 12: 45pm IST:
According to Indonesia's meteorological agency, tsunami wave of 9 centimetres (3.54 inches) washed onto the small island of Jailolo, but it has not caused any damage. There are no casualties reported so far.
The Pacific Tsunami Warning Centre has, in the last hour or so, lifted its advisory for potential hazardous waves for coastal communities, Fox News reports.
The early-morning quake was strongly felt by people in several Indonesian towns and cities sending many people into panic. People were seen running from homes and other buildings, residents and officials have told some news sources.
A tsunami warning was issued on Saturday after a magnitude 7.3 earthquake was recorded off the Moluccas in Indonesia, according to the US Geological Survey.
The Pacific Tsunami Warning Centre in Hawaii said tsunamis were possible within 300 kilometres of the quake's epicentre and nearby areas need to be prepared.
"We have issued an early tsunami warning," Indonesia's meteorological agency told AFP.
The waves are expected to reach Indonesia, the Philippines, Palau, Papua New Guinea, the Solomon Islands and Marshall Islands, and even to faraway places such as Japan's Okinawa and Taiwan.
The first waves of the tsunami might reach land within 30 minutes of the earthquake and may continue for about six hours. "The initial wave many not be the largest," the centre said.
"Tsunami waves reaching 0.3 to 1 meters above the tide level are possible for some coasts of Indonesia," the warning centre said in a statement on its official website.
"Tsunami waves are forecast to be less than 0.3 meters above the tide level for the coasts of Philippines," it said adding that governments must take action to inform and instruct any coastal populations at risk.
Saturday morning's undersea quake occurred at around 8:01 local time at a depth of 47 kilometres with the epicentre 134 kilometres north west of Ternate.
An aftershock measuring magnitude 6.2 was immediately recorded off Indonesia's Sulawesi, according to the USGS.