A gun battle has broken out between Brazilian police and members of a gang who pulled off the "robbery of the century" in Paraguay on Monday.

Three gang members were killed and two were injured in the clash, it has been reported.

A convoy of dozens of armed men rolled into Paraguay's lawless Ciudad del Este border town in the early hours of Monday, using grenades, machine guns and explosives to stage a heist worth an estimated $40 million.

One policeman was killed and another injured, and three civilians wounded, in the attack on the Prosegur cash-storage facility.