The observatory says the Strong Wing Signal No 3 is expected to remain in place overnight and for some time on Wednesday morning, though the chance of a higher warning level is believed to be relatively low.
The No 3 signal was issued at 4.25pm on Tuesday as a tropical depression was about 120 kilometres south-southwest of Hong Kong.
The storm was forecast to move slowly eastwards towards the coast of Guangdong and come within 100 kilometres of the SAR overnight.
The observatory said winds of up to 62 kilometres per hour were expected.
"Unless the tropical depression intensifies significantly and moves even closer to Hong Kong, the chance of gales generally over the territory is expected to be relatively low," the observatory said.
It added that the tropical depression would continue to bring the territory showers and squalls for the next few days.
Education officials said the No 3 signal meant classes of kindergartens and schools for children with disabilities were suspended for the rest of Tuesday.