Catalyzes the cyclization of farnesyl diphosphate to avermitilol. (2E,6E)-farnesyl diphosphate + H2O = avermitilol + diphosphate Binds 3 Mg(2+) ions per subunit. kcat is 0.04 sec(-1). The recombinent enzyme produces avermitilol (85%), accompanied by small quantities of germacrene A, germacrene B and viridiflorol. Belongs to the terpene synthase family.