The observatory says it will downgrade the T8 signal to a T3 at 8.20pm on Wednesday as Severe Typhoon Ragasa continues to move away from Hong Kong after making landfall over Yangjiang in Guangdong.
Forecasters said local winds are weakening gradually, although parts of the territory are still being hit by gales.
They advised people to stay on the alert.
"Under the influence of the outer rainbands of Ragasa, there will be occasional squally showers and thunderstorms on Wednesday and Thursday locally. Showers will be heavy at first. Seas will be very rough with swells," the observatory said.