The tsunami warning for the Pacific island nation and its neighbours was later cancelled.
The tremor struck 40 kilometres west of Panguna on Papua New Guinea's Bougainville island at a depth of 153 kilometres at 3:30 pm local time (1000 IST), the US Geological Survey said.
No reports of damage or injuries have emerged so far, said the PNG Geophysical Observatory in the capital Port Moresby.
"But we know that given such a depth at which the earthquake happened, the chances of any major damage or casualties are not highly likely," spokesman Mathew Moihoi told AFP.
USGS's preliminary assessment was that light to moderate damage was possible on Bougainville island. The quake was revised down from 8.0-magnitude to 7.9.
The Pacific Tsunami Warning Center said waves of between 0.3 and one metre (1-3 feet) above tide level were possible for some coastal areas of PNG and the neighbouring Solomon Islands.
The center issued another statement about an hour later to say that threat had passed.
"Even though it is quite deep at 150 kilometres, because it is such a large earthquake, it will produce shaking on the surface," Geoscience Australia seismologist Spiro Spiliopoulos told AFP earlier.
Aid group Save the Children has a office on Buka island next to the main Bougainville island.
Its PNG country director Jennifer El-Sibai described the quake as "really powerful" but said no reports of damage had been received so far.
Connie Wihongi-Stevens posted on Facebook that her husband, who is working in Arawa some 46 kilometres west of where the quake struck, was safe but shaken.
"The home he was in shook terribly and people were running everywhere cars rocking to and fro not nice hoping to hear from him when the power comes back on," she wrote.
Earthquakes are common near Papua New Guinea, which lies on the 4,000-kilometre-long Pacific Australia plate.
It forms part of the "Ring of Fire", a hotspot for seismic activity due to friction between tectonic plates.
In 2013 the Solomon Islands were hit by a devastating tsunami after an 8.0-magnitude earthquake rattled the region. That tsunami left at least 10 people dead, destroyed hundreds of homes and left thousands of people homeless.
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