The US Geological Survey said the shallow tremor hit approximately 82 kilometres east of the lightly populated Loyalty Islands at around 09:45 am.
The Pacific Tsunami Warning Center initially issued an alert saying areas within 300 kilometres could be affected, including Vanuatu and New Caledonia, whose capital Noumea sits some 250 kilometres east of the epicentre.
It said that tsunami waves had been "observed" but gave no location or further detail.
There have been no immediate reports of damage.
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Pierre Lebellegard, a seismologist for the French Research Institute for Development, told AFP the Loyalty Islands had been seismically active for the past three weeks.
"They must be very frightened in Mare," he told AFP, referring to the main island where over 5,600 people live.
He added that such quake clusters "happen every 10 to 15 years" in the area.
"Parked cars were shaking and everyone went outside," one official from Mare told AFP.
"I thought I was going to faint, I was very afraid and I rushed out of my building," said a resident of central Noumea.
Geoscience Australia seismologist Spiro Spiliopoulos said damage in the capital was unlikely.
"They will feel moderate shaking, but there is a low likelihood of damage from the earthquake itself in Noumea," he told AFP.
Monday's earthquake followed a series of temblors to hit the Loyalty Islands area over the past few weeks, including a 6.8-magnitude quake that struck at the end of October.