The airline says flight NZ245 from Auckland to Bali, due to depart today, has been cancelled as a result of volcanic activity.
It was shooting a column of ash more than 2,500 meters (8,200 feet) into the sky on Friday and officials said operations at Indonesia's second-busiest airport would be reviewed every few hours.
The airport had been closed since 3 a.m. local time on Friday.
It's far from the first time Agung has interrupted travel plans for WA holiday-makers, with a November eruption past year causing chaos to flight schedules.
The volcano, about 70 kilometers (45 miles) northeast of Bali's tourist hotspot of Kuta, last had a major eruption in 1963, killing about 1,100 people. The return flight NZ246 from Denpasar to Auckland was also cancelled.
Thousands of Australians have put their dreams of a Bali holiday on hold with flights from capital cities cancelled after Indonesia's Mount Agung began spewing water vapour and ash into the atmosphere.
This move to shut down the airport is necessary as the authorities do not want any airplane flying through volcanic ash, which could be detrimental.
Almost 450 flights were cancelled on Friday, affecting some 75,000 people, as the Mount Agung volcano gushed a 2500m column of ash and smoke for a second day.
Sutopo Purwo Nugroho of Bali's disaster mitigation agency said seismic activity was still rife deep under the volcano.
Jetstar cancelled 10 flights to and from Bali, as Qantas also turned back to Melbourne and Sydney flights to the island, and cancelled two more.
Indonesia, an archipelago of more than 250 million people, sits on the Pacific "Ring of Fire" and is prone to earthquakes and volcanic eruptions.
An earlier flight on AirAsia was called off before the airport was shuttered early Friday morning.
Local government seismologists monitor more than 120 active volcanoes.
Citilink said it will continue all efforts to accommodate passengers seeking to continue their journey.
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