A massive earthquake of magnitude 7.6 struck north of Honduras in the Caribbean Sea on Tuesday (US time), sparking a tsunami warning in the area, the Pacific Tsunami Warning Centre said.

The Pacific Tsunami Warning Centre later cancelled the warning, saying "The tsunami threat from this earthquake has passed and there is no further threat".

Earlier, the quake rattled windows in the Honduran capital of Tegucigalpa roughly 519km to the east, but no damage was immediately reported. It was also lightly felt in the Mexican state of Quintana Roo north of Honduras, according to Mexico's civil protection director.

The US Geological Survey said the quake, initially reported as a magnitude 7.8, was centred 202km northeast of Barra Patuca in Honduras and 307km southwest of George Town in the Cayman Islands.

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It was very shallow, only 10km, which would have amplified its effect.

According to the US Tsunami Warning Centre, hazardous tsunami waves were possible within 1000km of the quake's epicentre. Waves reaching 0.3m to 1m above tide level are possible for some coasts.

This included some coastal areas of Jamaica, Mexico, Cuba, Belize, Costa Rica, Panama, Cayman Islands, Honduras, Nicaragua, Guatemala, Puerto Rico and the Virgin Islands.

"A tsunami advisory is issued when a tsunami with the potential to generate strong currents or waves dangerous to those in or very near the water is imminent, expected, or occurring," the warning read.

People near the coast were warned to seek higher ground immediately.

The northern coast of Honduras closest to the quake's epicentre is sparsely populated, with much of it covered by nature reserves.

President Juan Orlando Hernandez via Twitter said that Honduras had activated its emergency system and asked people to remain calm.

In the Cayman Islands, Sgt. Dave McKay with Royal Cayman Islands Police told The Associated Press that hazard management officials had not issued a tsunami alert but authorities were monitoring the situation.

No tsunami is expected along the United States' Gulf and East Coasts.

Puerto Rico and other Caribbean islands are still recovering from the devastating hurricane that struck in September last year.

- additional reporting AAP, AP, Reuters, news.com.au