The eruption was far larger than one a year ago that caused international travel chaos — but scientists said it was unlikely to have the same widespread effect.
University of Iceland geophysicist Magnus Tumi Gudmundsson said the eruption of the Grimsvotn volcano was "much bigger and more intensive than Eyjafjallajokull," the volcano whose April 2010 eruption shut Europe's airspace for five days.
"There is a very large area in southeast Iceland where there is almost total darkness and heavy fall of ash," he said. "But it is not spreading nearly as much. The winds are not as strong as they were in Eyjafjallajokull."
He said the ash is coarser than in last year's eruption, falling to the ground more quickly.
The ash plunged areas near the volcano into darkness and covered buildings, cars and fields in a thick layer of gray soot Sunday. Civil protection workers urged residents to wear masks and stay indoors.
Airport and air traffic control operator ISAVIA said Keflavik airport, the country's main hub, was closed at 0830 GMT (4:30 a.m. EDT), and would stay shut for the rest of the day.
Spokeswoman Hjordis Gudmundsdottir said the ash plume was covering Iceland, but "the good news is that it is not heading to Europe."
She said the ash was blowing northwest toward Greenland instead.
Trans-Atlantic flights were being diverted away from Iceland, and there was no indication the eruption would cause the widespread travel disruption triggered last year by ash from Eyjafjallajokull.
In April 2010, officials closed the continent's air space for five days, fearing the ash could harm jet engines. Some 10 million travelers were stranded.
The Grimsvotn volcano, which lies under the uninhabited Vatnajokull glacier about 120 miles (200 kilometers) east of the capital, Reykjavik, began erupting Saturday for the first time since 2004.
Gudmundsson said the new eruption was 10 times as powerful as that one, which lasted for several days and briefly disrupted international flights. He said the eruption was Grimsvotn's largest for 100 years.
Grimsvotn also erupted in 1998, 1996 and 1993. The eruptions have lasted between a day and several weeks.
Sparsely populated Iceland is one of the world's most volcanically active countries and eruptions are frequent. Grimsvotn and Iceland's other major volcanoes lie on the Atlantic Rift, the meeting of the Euro and American continental plates.