Mount Agung, about 75 kilometres (47 miles) from the tourist hub of Kuta, has been shaking since August, threatening to erupt for the first time in more than 50 years and forcing more than 80,000 people to flee their homes.
Bali attracts millions of foreign visitors every year to its palm-fringed beaches and an eruption would be a major blow to its tourism-dependent economy.
The airport in Bali's capital Denpasar has not been affected but several countries including Australia and Singapore have issued travel advisories warning travelers to exercise caution.
Bali's menacing volcano puts some tourists' plans on back burner
In anticipation of an eruption, Indonesia plans to divert flights headed for Bali to ten other airports, including on nearby Lombok and to the capital Jakarta.
"The planes will be diverted to their nearest location or where it originally took off from," transport minister Budi Karya Sumadi said.
Airlines are watching the situation closely and 100 buses have been prepared to evacuate tourists.
Virgin Australia said it would be making an extra fuel stop in Darwin for some of its flights between Australia and Bali in case it is forced to turn back.
Singapore Airlines said customers travelling between September 23 and October 2 could rebook flights or ask for a refund.
Thousands evacuated from Vanuatu island as volcano erupts
Officials announced the highest possible alert level on Friday due to the increasing volcanic activity, and told people to stay at least nine kilometres away from the crater.
The Indonesian Center for Volcanology and Geological Hazard Mitigation recorded almost 300 tremors Wednesday morning. A thin column of smoke can be seen rising from the mountain's summit.
Indonesia lies on the Pacific "Ring of Fire" where tectonic plates collide, causing frequent seismic and volcanic activity.
Mount Agung last erupted in 1963, killing nearly 1,600 people.
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