A coast guard helicopter has been sent to assess the situation and the exact location, the Civil Protection agency said, Reuters reported.
The eruption began north of the fishing town of Grindavik but it was still not clear exactly where the lava was emerging from or in which direction it was flowing, said broadcaster RUV.
The last eruption on the peninsula started in the Svartsengi volcanic system on Dec. 18 following the complete evacuation of the town of Grindavik’s 4,000 inhabitants and the closing of the Blue Lagoon geothermal spa, a popular tourist spot.
Grindavik was ultimately spared as the lava flowed in a different direction from the town.
Lying between the Eurasian and North American tectonic plates, two of the largest on the planet, Iceland is a seismic and volcanic hot spot as the two plates move in opposite directions.