The latest tremor had a magnitude of seven and struck just 10 km underground according to the US Geological Survey. It was followed by two aftershocks.
Officials issued a tsunami warning, which was later cancelled
"Please go to a place with higher ground, while remaining calm and not panicking," Dwikorita Karnawati, head of the agency for meteorology, climatology and geophysics, told local TV.
Seawater had entered two villages as high as 10 cm and 13 cm (4-5 inches), Karnawati said later.
Sutopo Purwo Nugroho, spokesman for Indonesia's disaster mitigation agency, said many buildings were thought to have been damaged in Lombok's main city of Mataram.
"They are mostly buildings with weak construction material," Nugroho said.
Residents in Mataram described a strong jolt that sent people scrambling out of buildings.
"Everyone immediately ran out of their homes, everyone is panicking," Iman told AFP.
Another resident Rita Siswati, 47, said the quake knocked out electricity and patients were evacuated from the main hospital.
The epicentre was in the sea 18 km northwest of Lombok, the USGS said, far from the main tourist spots on the south and west of the island.
The USGS reported two aftershocks, one with a magnitude of 5.4.
The quake was felt some 100 km (60 miles) away on the bustling resort island of Bali, and there were early reports of damage including to Ngurah Rai International Airport.
Agung Widodo, a resident of Bali's main town of Denpasar, said he felt two strong tremors.
"The first one lasted quite a while, the second one was only about 2-5 seconds. The first one was the bigger one," he told AFP.
People could be heard screaming as locals and tourists ran onto the road.
The tremor came a week after a shallow 6.4-magnitude quake hit Lombok, killing 17 people and damaging hundreds of buildings.
It triggered landslides that briefly trapped trekkers on popular mountain hiking routes.
Indonesia, one of the most disaster-prone nations on earth, straddles the so-called Pacific "Ring of Fire", where tectonic plates collide and many of the world's volcanic eruptions and earthquakes occur.
In 2004 a tsunami triggered by a magnitude 9.3 undersea earthquake off the coast of Sumatra in western Indonesia killed 220,000 people in countries around the Indian Ocean, including 168,000 in Indonesia.