An armed man who killed at least 35 people in an attack on a nightclub in Turkey were dressed as Father Christmas, witnesses have said.

At least one gunman entered the Reina nightclub in Istanbul at around 1.30am local time on New Year's Day (11.30pm GMT), as hundreds of people were celebrating the start of 2017.

The attacker is believed to have shot at police outside the nightclub, killing one officer, before entering and firing on people inside. Some customers jumped into the waters of the Bosphorus strait to escape the massacre.

He killed at least 35 people and injured 40 more, according to Istanbul's governor, Vasip Sahin.

Turkish media released CCTV footage appearing to show one of the men inside the club, wearing a Santa costume. It isn't clear what purpose the outfits served or any of the other motives behind the attack.

Mr Sahin described the shooting as a terrorist attack without making any comment on who might have carried it out. There was no immediate claim of responsibility.

“Unfortunately (he) rained bullets in a very cruel and merciless way on innocent people who were there to celebrate New Year's and have fun,” Mr Sahin said.

People talk to medics in an ambulance near the scene of an attack in Istanbul on 1 January 2017 (AP)