Iceland's Meteorological Office said that eruptions from the Grímsvötn volcano – which hasn't erupted since 2004 - began as subglacial eruptions which quickly broke its ice covering and sent smoke and ash 65,000 ft. into the air.
The ash plume is expected to drift east and north away from Europe, no expected impact on the European airspace for at least the first 24 hours.
The Grimsvotn eruption is larger than last year's Eyjafjallajokull eruption, but is not likely to have the same massive effect.
In April 2010, when Iceland's Eyjafjallajokull's volcano erupted it left some 10 million travelers worldwide stranded and cost airlines an estimated $1.7 billion, according to the International Air Transport Association.
On Sunday Isavia, the Icelandic company that operates all airport facilities and air navigation in the nation, shut down the nation's largest airport, Keflavik, for the day.
A no-fly zone is being enforced for 120 nautical miles in all directions of the eruption.
"A danger area has been established for all instrument flying that includes the upper approach airspace for the Keflavik and Reykjavik international airports. Visual flight rule operations are currently not affected," Isavia said in a statement.
Volcanic activity can wreak havoc on international air traffic.
Eruptions can spew a torrent of hot, tiny particles of rock, glass and sand that can be sucked into a jet engines and cause engine failure.
In 1982, a British Airways flight lost all four engines after flying through an ash cloud and got power back only after diving to a lower altitude. In 1989, Alaska's Mount Redoubt damaged a Boeing 747, but it too, was able to land safely.
The Grimsvotn volcano is not expected to cause any prolonged disruptions, but conditions may vary depending on the duration of the eruption, wind patterns, and the height the ash plume.
Grimsvotn last erupted in 2004, 1998, 1996 and 1993.