It was shooting a column of ash more than 2,500 metres (8,200 feet) into the sky on Friday and officials said operations at Indonesia's second-busiest airport would be reviewed every few hours.
Indonesia's second-busiest airport will stay shut until at least 7pm local time on Friday, with 85 global flights and 191 domestic flights cancelled, affecting almost 16,000 people, airport authorities said.
According to The Star, the airport was shut on Friday (June 29) and will remain close until 7pm local time.
The early morning closure of Ngurah Rai airport sparked the cancellation of almost 280 flights to and from the tropical paradise with some 15,700 passengers affected, according to revised figures from an airport spokesman.
Activity at the volcano was high last year and forced the evacuation of tens of thousands of people, but it had been quieter this year.
Air New Zealand said flight NZ245 from Auckland to Denpasar and the return flight NZ246 from Denpasar to Auckland have been cancelled today.
Domestic airports at Banyuwangi and Jember were also closed, Sutopo Purwo Nugroho, a spokesman for Indonesia's disaster mitigation agency said on Twitter.
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Airlines avoid flying through volcanic ash as it can damage aircraft engines, clog fuel and cooling systems and hamper visibility.
Indonesia is home to around 130 volcanoes due to its position in the highly active ring of fire - a belt of tectonic plate boundaries in the Pacific Ocean which is vulnerable to frequent seismic activity.
Qantas Airways Ltd., Singapore Airlines Ltd., AirAsia Bhd. and PT Garuda Indonesia are among the airlines operating flights to Bali, which draws an estimated 5 million tourists annually.
"Well it's Bali, these things happen and we are fine with it".
Thousands were stranded at the airport or area hotels Friday, but it was not immediately clear how many tourists were unable to leave the island.
Its last major eruption in 1963 killed around 1,600 people.