Irene had top wind speeds of 100mph (155km per hour) and was 400 miles (650km) south-east of Nassau, the US National Hurricane Center said.
It added that Irene could become "a major" hurricane in the next 48 hours.
Officials earlier warned the entire US east coast should be ready for the first hurricane of the Atlantic season.
The US officials said the storm could possibly make landfall in Georgia, South Carolina or North Carolina.
Irene - which was earlier downgraded to a category 1 storm - has already brought heavy downpours as it swept over the Dominican Republic where 1,000 people sought refuge in shelters.
Praying
On Tuesday, Irene was pounding the UK overseas territory of the Turks and Caicos Islands with winds and rain; south-eastern parts of the Bahamas were also feeling the effects.
"I pray God's blessing on us all," Bahamas Prime Minister Hubert Ingraham said, urging residents to take shelter.
It was not immediately known if Irene caused any major damage to the Turks and Caicos and the Bahamas.
Earlier in Puerto Rico, the storm knocked out power to more than half the island and affected the water supplies of more than 100,000 people.
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