Five people were killed in Odisha in the heavy rains ahead of the storm. Of them, three persons, including a woman, were killed after uprooted trees fell on them in the state capital and at Khalikote and Polsara in Ganjam district, police said.
As Phailin closed in, water level along the Odisha coast rose.
Heavy to very heavy rains were reported from the districts of Gajapati, Ganjam, Khurda, Puri, Jagatsinghpur, Nayagarh, Cuttack, Bhadrak and Kendrapara in coastal region.
In Andhra Pradesh, 1,29,100 people from 294 villages in Srikakulam, Vizianagaram and Visakhapatnam districts were shifted to a total of 115 relief camps, an official release said.
On Saturday, 64,000 people in the north coastal districts of Srikakulam, Vizianagaram, Visakhapatnam in Andhra Pradesh were evacuated to safer places.
Vizianagaram Collector Kantilal Dande said 10,000 to 15,000 people living in vulnerable areas are being evacuated and they are monitoring the situation on a minute-to-minute basis.
The East Godavari district administration shifted fishermen from Uppada-Kakinada area to safer places in view of the cyclone.
Irrigation officials are monitoring levels in water bodies in the coastal district, where medical teams have been kept ready, they said, adding, "We are expecting the intensity of cyclone to be more in the night."
Fishermen have been advised not to venture into the sea for the next 72 hours. Special control rooms have been set up in Kakinada, Ramachandrapuram and Amalapuram towns to monitor the situation.
Thirteen special officers have been deputed to assess the situation on the Andhra Pradesh coastline and 63 relief camps have been opened in the district.
The Centre said that 5 lakh tonnes of foodgrains is kept ready for distribution to victims of high intensity cyclone Phailin.
"We are ready with 5 lakh tonnes of foodgrains for distribution to cyclone-affected people in Andhra Pradesh and Odisha," Food Minister K V Thomas told reporters.
All trains between Howrah and Visakhapatnam have been suspended till Sunday night and power supply switched off along the Odisha coastline, and three coastal districts in Andhra Pradesh as a precautionary measure.
Flights and trains from Odisha capital Bhubaneshwar have also been suspended.
At least 10 flights of Air India, Indigo and Jet Airways scheduled to arrive or take off from the airport here remained cancelled, director of Biju Patnaik International Airport Sarad Kumar told PTI.
Nearly eight lakh people were evacuated, with over seven lakhs in Odisha.
Most of the evacuated people have been sheltered in 500 specially-built cyclone camps in the two states. Each cyclone shelter can accommodate up to 1,500 people while their ground floors may be used as cattle shelters.
Srikakulam district, bordering Odisha, started receiving heavy rainfall under the cyclone's impact since morning.
Prime Minister Manmohan Singh directed that all possible assistance be extended to the states which are on alert for cyclone 'Phailin' after reviewing the situation soon after his return from an overseas tour.
The Prime Minister's Office said Singh was briefed by the Cabinet Secretary immediately upon his return from Indonesia. He was apprised about the arrangements which have been put in place to deal with the crisis.
"PM was briefed by the Cabinet Secretary on the arrangements that have been put in place to deal with the impact of the cyclone," the PMO said in a tweet.
According to reports, UPA chairperson Sonia Gandhi has also been in constant touch with the Union Home Minister to take a stock of the situation in cyclone-hit Odisha and Andhra Pradesh.
She also said that the government and Congress would do everything to stand beside the cyclone-hit states.