Forecasters said Irene, while diminished in strength, still carried sustained winds of 104km/h after it's long journey up the East Coast, where it dropped a 300mm of rain on North Carolina and Virginia.
As the eye of the sprawling storm neared the largest American city, it pushed an 2.5m Atlantic storm surge toward the metropolis, stretching east from the US financial capital.
The National Hurricane Centre said early on Sunday that Irene was moving to the north-northeast at 40km/h as it pushed northeast toward New England. Officials also warned that isolated tornadoes were possible in the northeast throughout the morning.
The huge storm 805km wide - had threatened 65 million people up and down the Atlantic coast, estimated at largest number of Americans ever affected by a single storm.
New York was eerily quiet. In a city where few people use personal cars, the population stayed indoors. The entire transit system was shut down because of weather for the first time in history.
All the city's airports were closed, with more than 9 000 flights cancelled. Broadway shows, baseball games and other events were all cancelled or postponed.
Mayor Michael Bloomberg had warned New York's millions of residents they needed to avoid or evacuate low-lying areas.
Forecasters said there was a chance a storm surge on the fringes of Lower Manhattan along New York Harbour could send sea water streaming into the maze of underground vaults that hold the city's cables and pipes, knocking out power to thousands and crippling the city.
Officials' feared water would slosh into Wall Street, the ground zero location of the former Twin Towers and the luxury high-rise apartments of Battery Park City.
Battery Park City in the extreme south of Manhattan island was virtually deserted as rain and gusty winds pummelled streets and whipped trees. Officials were bracing for a storm surge of several feet that could flood or submerge the Promenade along the Hudson River.
On Wall Street, sandbags were placed around subway grates near the East River because of fear of flooding.
In Times Square, shops boarded up windows and sandbags were stacked outside of stores. Construction at the World Trade Centre site came to a standstill.
But taxi cabs were open for business.
"I have to work. I would lose too much money," said cabbie Dwane Imame, who worked through the night. "There have been many people, I have been surprised. They are crazy to be out in this weather."
New York has seen only a few hurricanes in the past 200 years. The Northeast is much more accustomed to snowstorms - including a blizzard last December, when Mayor Michael Bloomberg was criticized for a slow city response.
Irene made landfall just after dawn on Saturday near Cape Lookout, North Carolina, at the southern end of the Outer Banks. Shorefront hotels and houses were lashed with waves, two piers were destroyed and at least one hospital was forced to run on generator power.
The number of airline passengers affected by the storm could easily be in the millions because so many flights make connections on the East Coast.
Irene caused flooding from North Carolina to Delaware, both from the 2m waves it pushed into the coast and from heavy rain.
More than one million of the homes and businesses without power were in Virginia and North Carolina, which bore the brunt of Irene's initial fury. Then the storm knocked out power overnight to hundreds of thousands in Washington, Maryland, Delaware, Pennsylvania, New Jersey, the New York City area and Connecticut.
Eastern North Carolina got up to 350mm of rain, according to the National Weather Service. Virginia's Hampton Roads area was drenched with at least 230 mm, and up to 40mm in some places.
North Carolina Governor Beverly Perdue said Irene inflicted significant coastal damage, but some areas were unreachable because of high water or downed power lines.
A nuclear reactor at Maryland's Calvert Cliffs went offline automatically when winds knocked off a large piece of aluminium siding late Saturday night. Constellation Energy Nuclear Group said the facility and all employees were safe.
Irene was the first hurricane to make landfall in the continental United States since 2008, and came almost six years to the day after Katrina ravaged New Orleans.
State of emergency
In Philadelphia, Mayor Michael Nutter declared a state of emergency, the first for the city since 1986. "We are trying to save lives and don't have time for silliness," he said.
The storm hit Washington just days after an earthquake damaged some of the capital's most famous structures, including the Washington Monument.
In New Jersey, the Oyster Creek nuclear plant, just a few kilometres from the coast, shut down as a precaution as Irene closed in. And Boston's transit authority said all bus, subway and commuter rail service were suspended Sunday.
The deaths blamed on Irene included two children, an 11-year-old boy in Virginia killed when a tree crashed into his home and a North Carolina child who died in a car crash at an intersection where traffic lights were out.
Four other people were killed by falling trees or tree limbs - two in separate Virginia incidents, one in North Carolina and one in Maryland. A surfer and another beach-goer in Florida were killed in heavy waves.