Spewing steam and sending tremors through the area, the volcano's alert status was raised to the highest level last week.
Since then, tens of thousands of villagers have been urged to abandon their homes beneath the menacing volcano.
The national disaster management agency has housed evacuees in tents, school gyms, and government buildings in neighbouring villages.
While there are plentiful stocks of food, water, medicines, and other supplies, evacuees fear they are in for a long wait that could disrupt their livelihoods.
One farmer said he was worried that lava flows could destroy his house and farm.
"If my house is destroyed I don't know how to restart my life," Gusti Gege Astana said.
"I don't know where my kids will sleep and all I can do now is pray."
Officials also noted there are around 30,000 cattle within the danger zone around the volcano, and efforts are being made to move the livestock as it is an important source of income for many residents.
More than 1000 people were killed the last time Mount Agung erupted, in 1963.
An elderly woman who survived that eruption said evacuation instructions had come much earlier this time.
"Back then we weren't evacuated until it got really dangerous," Gusti Ayu Wati, 82, said.
"Life went on as normal when ash and gravel was falling on us, until the big lava came out and destroyed everything."
Indonesia has nearly 130 active volcanoes, more than any other country.
Many of these show high levels of activity but it can be weeks or even months before an actual eruption.
Bali's tourism department on Thursday issued a letter reassuring travellers, and noting that flights were operating normally.
"The island is safe except for areas around Mount Agung. We urge tourists to continue visiting," the letter said.
The transportation minister said Bali-bound flights could be diverted to 10 airports across the country in case of an eruption.
Earlier this week, New Zealand's Ministry of Foreign Affairs issued a travel warning, advising that the increased volcanic activity could disrupt flights, and travellers should register with the ministry.
Ash clouds from volcanic eruptions have disrupted tourism in Bali and other parts of Indonesia in recent years.
Hundreds of domestic and international flights were disrupted in 2016 when a volcano erupted on Bali's neighbouring Lombok island, sending columns of ash and debris into the air.