The storm whipped up gusts of 110 miles per hour as it tracked the US coastline and moved north at 6 miles per hour about 110 miles east of Cape Canaveral, the National Hurricane Center said.
While Dorian was downgraded to a Category 2 storm on Tuesday, forecasters warned the system had grown in size and that its devastating hurricane-force winds extended 60 miles from the centre.
“Even though the storm’s category has changed, Dorian is still expected to bring life-threatening storm-surge, heavy wind and rain," said Carlos Castillo, a FEMA deputy administrator.
Florida Governor Ron DeSantis said he was grateful Florida was poised to dodge the worst of the storm, when a week ago it looked like a potential catastrophe for the southeastern state.
The storm instead proved devastating for the Bahamas, where it was confirmed that seven people had died and more than 60,000 are expected to need drinking water in the coming days and weeks.
On Grand Bahama island and the Abaco islands, among the worst affected, more than 13,000 homes were severely damaged or destroyed – some 45 per cent of the total.
Gusts of up to 220mph earlier had ripped the roofs off houses while the torrential rain saw water sweeping through the streets, forcing some to seek shelter in the attic.
Satellite images suggested that vast swathes of the islands were still under water. As much as 35 inches of water was estimated to have been dumped on the Bahamas.
Reports of locals trapped in their homes with small children and radio stations being bombarded with distress calls about missing loved ones have begun to surface.
“We are in the midst of a historic tragedy”, said Bahamas Prime Minister Hubert Minnis. "The devastation is unprecedented and extensive."
Forecasts of Dorian’s trajectory suggest that its centre will now not move onto the US mainland but instead track the coastline north before turning east.
However experts warned that the hurricane’s course could change at any moment and said it will still cause life-changing storm surges and flooding to America's eastern coastal regions.
More than two million people in Florida, Georgia and South Carolina have been urged to evacuate. The hurricane was approaching the Florida coast on Tuesday afternoon.
Dorian had become practically stationary after hitting the Bahamas on Sunday – a rarity for major hurricanes – but on Monday was moving slowly northwest at around 2mph, the equivalent of walking pace.
It has meant that the Bahamas, and in particular Grand Bahama and the Abaco islands, have endured the brunt of the storm's ferocity.
Matthew Cochrane, a Red Cross spokesman, estimated that more than 60,000 people on the islands will need access to clean drinking water.
“What we are hearing lends credence to the fact that this has been a catastrophic storm and a catastrophic impact,” Mr Cochrane said.
A text message seen by AFP from a woman named Kendra Williams, who lives on Grand Bahama, offered a glimpse of the panic the hurricane had caused among locals.
It read: "We are under water; we are up in the ceiling. Can someone please assist us or send some help. Please. Me and my six grandchildren and my son, we are in the ceiling."
Yasmin Rigby, a resident of Grand Bahama’s main city Freeport, said locals had been gripped by fear as winds tore off shutters and water begun to pout into people’s homes.
"People who thought they were safe are now calling for help," Ms Rigby told AFP. "My best friend's husband is stuck in the roof of their house with seven feet [of] water below."
One radio station said it got more than 2,000 distress messages, including reports of a 5-month-old baby stranded on a roof and a woman with six grandchildren who cut a hole in a roof to escape rising floodwaters.
Rescue efforts were hampered by the fact that the Grand Bahama airport was under 6 feet (2 meters) of water. The island’s main hospital was also rendered unusable due to flooding.
The US Coast Guard airlifted at least 21 people injured on Abaco Island. Bahamas officials said they expected the death toll to rise.
Britain has joined the rescue effort, with the Department of International Development sending three humanitarian experts to the Bahamas.
UK government officials also said the RFA Mounts Bay was ready to offer her assistance if requested by the Bahamas Government.
The vessel carries water carriers, hygiene kits that include soap and sanitary items shelter kits for families that have been left homeless. It also has a helicopter able to help with reconnaissance.
The Queen said in a statement that she and Prince Philip were “shocked and saddened” by the damage caused by the hurricane and expressed "sincere condolences" to those affected.