A powerful 7.8-magnitude earthquake struck New Zealand's South Island, generating a tsunami, triggering evacuations from many low-lying areas on the eastern shore and killing at least two people.

"On the best information we have, there have been two fatalities," Prime Minister John Key told a news conference in Wellington, Radio New Zealand reported today.

Key said the cabinet will meet later in the day and he will likely visited the affected areas.

Communications have been difficult and teams were still in the process of assessing the damage and counting the casualties, the prime minister was quoted as saying.

More than 100 aftershocks have hit the country since the tremblor struck around midnight.

The US Geological Survey (USGS) said that the 7.8-magnitude quake struck at a depth of 23 kilometres, with an epicentre some 91 kilometres north-east of the city of Christchurch.

In 2011, a 6.3-magnitude quake in Christchurch killed 185 people and caused widespread destruction.

The Civil Defence and Emergency Management Ministry warned that "waves of up to 3-5 metres along the coastlines closest to the earthquake epicentre" could be expected at the north-eastern shores of the South Island, like Blenheim, while the rest of the east coast can expect waves of up to 1-3 metres.

The ministry said the first tsunami wave had arrived in areas near Kaikoura and Wellington on the country's north-eastern coast.

A gauge at Kaikoura, 181 kilometres north of Christchurch, measured a wave of 2.5 metres, according to weatherwatch.co.nz.

Still on tsunami alert

In its latest update on Monday the ministry tweeted that "coastal areas between Blenheim and Banks Peninsula, and Chatham islands, are still prone to tsunami. Please remain on high ground," urging residents in these areas not to return home.

The impact of the powerful quake could be felt all across New Zealand, with people reporting shaking from Dunedin in the south and Auckland in the north.

The New Zealand GeoNet Project, which monitors geological hazards in the country, said that people in the worst-hit areas were "experiencing difficulty standing," that furniture and appliances were shifting and that the temblor may have caused damage to weak buildings.

Wellington Airport said on Twitter that the airport "is operational for morning flights following a full runway inspection."

But all services on the Wellington train network were suspended until further notice to go through a full inspection.

Reports of serious damage to houses and buildings were reported in local and social media. Trees were down, bridges destroyed and highways split open, and in some areas electricity had been cut off, officials told local media.

The New Zealand Transport Agency said some of the major state highways were closed because of damage caused by the earthquake, including to bridges, overbridges and tunnels.

In the capital Wellington, thousands of inner city residents left their homes for safer areas. Sirens could be heard and people were seen crying on the streets, local media said.

"Please note: Rail, ferry and replacement bus services will NOT be operating this morning (Monday). Strong advice is to stay at home," Wellington mayor Justin Lester wrote on Twitter.

All schools in the capital would remain closed until the buildings were checked, the Education Ministry said.

- dpa