Asuncion: At least 75 inmates, including members of Brazil's most powerful gang, have escaped from a Paraguayan prison after digging a tunnel that prison officials were allegedly aware of, Paraguay's government says.

The director of the penitentiary in the city of Pedro Juan Caballero, near the Brazilian border, was fired along with six other prison officials, Paraguayan Justice Minister Cecilia Perez told reporters.

The escaped prisoners included gang members from First Capital Command (PCC), Brazil's most powerful and sophisticated organised crime group, the government said.

An armoured vehicle stands guard at Pedro Juan Caballero city jail in Paraguay following the jailbreak. Credit:AP

"It's an operation that took days and it is impossible that the officials did not realise that they were leaving ... obviously this was a paid plan," Perez told local radio station Monumental.