The international airport on popular Lombok island was also among those closed late yesterday as Mount Raung on the main island of Java spewed clouds of ash, the transport ministry said.
The closures came during peak holiday season in Bali, a pocket of Hinduism in Muslim-majority Indonesia which attracts millions of foreign tourists every year to its palm-fringed beaches.
"It's pretty chaotic," Katie Nagar, an American expatriate living in Indonesia told AFP. She described arriving at the domestic terminal in Bali's Ngurah Rai airport to discover her flight to Jakarta on Indonesian flag carrier Garuda had been cancelled and rescheduled to Sunday.
An AFP reporter in the international terminal estimated about 1,000 people were stranded there, with some trying to seek information from airport officials while others were sitting or sleeping on the floor.
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Trikora Harjo, general manager at Ngurah Rai, said that 330 flights - 160 domestic and 170 international - had so far been cancelled at the airport due to the ash cloud.
"Right now the authorities have declared that the airport will be closed until 9:30 PM (1900 IST), totally closed," he said.
The disruption came as many Australians were in Bali for the school break, and many Indonesians were setting off on holiday ahead of the Muslim celebration of Eid next week.
Authorities raised the alert status of Mount Raung, a 3,300-metre volcano, late last month to the second highest level after it began to spew lava and ash high into the air.