The quake, which struck off the eastern province of Papua on Wednesday, was initially reported as a magnitude 6.4.
The US Geological Survey said the quake was centred some 30km beneath the ocean floor off Papua's northern coast. It was followed by a strong aftershock.
There were no initial reports of damage or casualties but residents said the tremor caused panic.
Yan Pieter Yarangga, a resident from the town of Biak, said hundreds of people ran out of their homes and fled beaches with some racing for higher ground for fear of a tsunami.
