A hurricane warning has been issued for New York City, as the U.S. Northeast braces for what President Barack Obama is calling “an extremely dangerous and costly” storm.

Forecasters say the storm, expected to make landfall in the U.S. on Saturday, could cause widespread flooding, power outages and billions of dollars in damage.

An estimated 65 million Americans live in Hurricane Irene's projected path — many of whom have been evacuated.

In New York City, Mayor Michael Bloomberg has ordered the city's first ever mandatory evacuation. Roughly 250,000 people have been told to leave their homes in low-lying areas of the city, including the Wall Street financial district. And in another first, New York City's entire public transit system, including subway trains and buses, will also shut down Saturday.

Mr. Obama said Friday that all indications point to Irene being a “historic” storm. He said the nation has to be “prepared for the worst.”

Irene is expected to hit first in North Carolina. Currently a Category Two storm on a five-point scale of intensity, Irene is expected to have an effect well inland — both from winds and flooding. The National Hurricane Center says the storm is now carrying maximum sustained winds of 160 kilometers an hour, but it is expected to weaken somewhat as it travels up the U.S. coast.

The governors of seven states — stretching from North Carolina to Connecticut — have declared states of emergency.

President Obama is cutting short his vacation in Massachusetts to return to Washington. He has directed agencies to ensure all the needed resources are available.

Airlines have already canceled hundreds of flights, and train services in parts of the eastern region have been suspended.

Homeland Security Secretary Janet Napolitano said Friday that federal and local authorities are taking the storm “very seriously.” She said President Obama has directed agencies to ensure all the needed resources are available.

The threat of the hurricane also led organizers in Washington to postpone Saturday's dedication of a memorial to civil rights leader Martin Luther King, Jr to Sunday.

Irene is the first hurricane to seriously threaten the United States in three years. It has already killed at least one person in Puerto Rico and two in the Dominican Republic, and also destroyed homes in The Bahamas.