NSW tsunami ignorers 'lucky': Keneally

Many beachgoers ignored tsunami warnings to enjoy the last day of summer - an outcome that NSW Premier Kristina Keneally labelled as "lucky".

All beaches were closed on Sunday morning from 8am (AEDT) following a tsunami warning from the Joint Australian Tsunami Warning Centre (JATWC).

An 8.8 magnitude earthquake struck near the central coast of Chile on Saturday at 5.43pm (AEDT), levelling buildings and killing hundreds.

The underwater tremor triggered a tsunami across the Pacific Ocean, sending waves up to 2m high to islands in French Polynesia.

All NSW beaches were closed and water events such as nippers training were cancelled.

People were ordered to stay out of the water and away from coastal areas due to the risk of dangerous waves, foreshore flooding and severe currents.

As of Sunday afternoon, only Port Kembla, on the state's south coast, had experienced minor tsunami waves.

But the JATWC kept its alert in place due to the risk of strong ocean currents that could arise from sudden changes in sea levels.

"It's almost like the tide comes in and goes out in less than half an hour," JATWC acting assistant director Alasdair Hainsworth told AAP. "So you can imagine the kind of currents and the potential danger to people in boats and also, more importantly, in the water.

But many people refused to leave, taking to surfing, swimming and rock fishing during the height of the alert.

"There was still quite a few people in the water and on the beach," an AAP photographer reported from Bondi Beach.

The State Emergency Service (SES) remained on alert and ready to assist if foreshore flooding did occur, an SES spokesman told AAP.

The Westpac Life Saver Rescue Helicopter conducted coastal patrols of Sydney beaches on Sunday and activated its audio alert to people fishing off rock platforms.

Premier Kristina Keneally said people should have obeyed the warnings and may not be so lucky if another tsunami hits Australia.

"Fortunately we have not yet seen the effects of the tsunami hit Australia although we are remaining vigilant," Ms Keneally told reporters in Sydney.

"Those people who did choose to go to the beach against advice were lucky. Next time, they may not be so lucky."