The US Tsunami Warning Centres issued the warning for Jamaica, Cuba and the Cayman Islands after the earthquake struck on Tuesday.
Evacuations were under way as far away as Miami, Florida, in the aftermath of the tremors.
The US Geological Survey said it was centred 117km (73 miles) north-west of Lucea.
There were no immediate reports of casualties.
At 3pm (8pm UK time) the warning was revised to say the threat of a Tsunami had passed.
The quake struck at a depth of around six miles, which means the range of the quake's impact is likely to be limited.
The International Tsunami Information Centre said: "Hazardous tsunami waves from this earthquake are possible within 300 km (186 miles) of the epicenter along the coasts of Jamaica... Cayman Islands and Cuba."
Several South Florida buildings were evacuated as a precaution, according to city of Miami and Miami-Dade County officials.
In the Cayman Islands, the quake left cracked roads and what appeared to be sewage spilling from split mains. Video emerging on social media appeared to show huge sinkholes had also opened up.
A spokeswoman for Cayman Islands Disaster Management Agency said there had been no reports of injuries or fatalities nor conclusive reports of damage to buildings.
On Twitter, the agency urged people to move away from coastal areas and said that those in low-lying areas should "evacuate vertically" in strong multi-story buildings.
It added a wave of between one and three feet "may have been generated".
Kevin Morales, editor-in-chief of the Cayman Compass newspaper, said his newsroom had been puzzled when it first hit because the islands see so few earthquakes.
"'It was just like a big dump truck was rolling past,"' Morales said. "Then it continued and got more intense."
Mikhail Campbell, a police media relations officer on the islands, told Reuters he was not immediately aware of any reports of serious damage.
In Santiago, the largest far-eastern Cuban city, local Belkis Guerrero told the Associated Press the quake was felt strongly there.
"We were all sitting and we felt the chairs move," she said. "We heard the noise of everything moving around."
She said there was no apparent damage in the heart of the colonial city.
"It felt very strong but it doesn't look like anything happened," she added.
The quake was not strongly felt in the Cuban capital of Havana or in Kingston, Jamaica, according to Reuters witnesses.
