According to meteorologists, there have been registered thousands of small earthquakes in the Reykjanes Peninsula recently.
Pictures on local media websites showed a bright red night sky.
Flights at the airport have not been affected and have been on schedule since the eruption began, the airport said.
"We ask people to stay calm and not under any circumstances go close to the eruption site or on Reykjanesbraut". The country has had an eruption every five years on average.
This means the eruption will not cause the same havoc seen in 2010 after the explosive eruption of Eyjafjallajökull.
Reykjavik's worldwide Keflavik airport was not closed following the eruption, but each airline had to decide for themselves if they want to fly or not, Icelandic Meteorological Office (IMO) said.
Officials quoted by AFP news agency said that the area of the eruption was open to the public, but could only be accessed by a hard hike of several hours from the nearest road.
Gas emissions - especially sulphur dioxide - can be elevated in the immediate vicinity of a volcanic eruption, and may pose a danger to health and even be fatal.
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What happened on Friday evening?
Lava began to flow on Friday night near Mount Fagradalsfjall on the Reykjanes peninsula.
A coastguard helicopter was sent to survey the area, about 30km (19 miles) from Reykjavik.
"I can see the glowing red sky from my window", said Rannveig Gudmundsdottir, who lives in Grindavik, 8 km (5 miles) from the eruption.
"The first image of the eruption".
Located between the Eurasian and the North American tectonic plates, among the largest on the planet, Iceland is a seismic and volcanic hotspot as the two plates move in opposite directions.