The Icelandic Met Office has lowered its aviation warning from red to orange near the Bardarbunga volcano, which saw an eruption begin overnight.
The new alert, the second-highest, means that aviation authorities can now decide if planes may travel over the volcano's airspace.
Scientists said a fissure eruption 1km (0.6 miles) long started in a lava field north of the Vatnajokull glacier.
The volcano has been hit by several recent tremors.
The Icelandic Met Office confirmed to the BBC that since no ash was detected in emissions from the volcano's eruption, it was now possible to downgrade the earlier alert level.
Civil protection officials said Icelandic Air Traffic Control had closed the airspace above the eruption up to a height of 5,000ft (1,500m), but now some aircraft will be able to pass over the volcano if aviation authorities give airliners the go-ahead.
The fissure eruption took place between Dyngjujokull Glacier and the Askja caldera, according to a statement from the Department of Civil Protection.