One person has died and another was injured after an explosion caused a crash between a truck and five cars and left wreckage strewn across a busy intersection in the Melbourne suburb of Footscray.

Key points: The explosion happened at Barkly St and Gordon St, Footscray

The explosion happened at Barkly St and Gordon St, Footscray A man in his 20s was declared dead at the scene

A man in his 20s was declared dead at the scene Cause may be linked to an oxy acetylene gas bottle

Cause may be linked to an oxy acetylene gas bottle Nineteen residents have been evacuated from the area

The explosion in the back of a truck at the intersection of Barkly Street and Gordon Street led to the collisions with other cars about midday on Tuesday.

Police believe an oxy acetylene bottle on the truck may have exploded, but they are yet to confirm that, saying they need to make the scene safe before investigations can begin.

At one point emergency officials were worried there might be another explosion.

Windows were blown out around the block and some buildings will need a structural assessment before being declared safe.

At least one damaged building has asbestos in it.

The driver of the truck, a man in his 20s, was declared dead at the scene.

A woman in her 30s, who was standing nearby at the time, was injured and has been taken to the Western Hospital in a stable condition.

Five other people were assessed by ambulance workers but were not injured.

Nineteen local residents were evacuated from the site and are being housed temporarily at the local scout hall.

Police were hopeful they would be allowed to return home by Tuesday night.

The accident took place at the corner of Gordon Street and Barkley Street in Footscray. ( Supplied: Zen Pang )

Acting Inspector Nigel L'Estrange said it was a chaotic scene when emergency services arrived.

"It was one vehicle that the explosion occurred in. It has impacted with a couple of other vehicles nearby, with a couple of injuries as well," he said.

"We have one male deceased in his early 20s who was the only occupant of the truck.

"We have one female in her late 30s taken to Footscray Hospital with non-life threatening injuries and we have a couple of other bystanders with minor injuries treated at the scene.

"It's been quite an explosion, just the distance of the actual buildings damaged by this. It was quite a significant blast."

Michael Markovic was with his wife driving along Barkly Street before they parked in the area.

"All of a sudden I heard a boom. My window was open and the car shook," he said.

"I turned around and there was all kinds of debris flying up in the air. I had no idea what it was.

"I looked around and there was a car, like a four-wheel drive or something like that on the corner. It's all damaged and I could see glass shattered everywhere across the road.

"I didn't know if it was a bomb or whatever it was. I thought to myself I should get away from here in case there's another explosion."

Explosion sounded like gun shot: witness

Debris of a gas or oxy acetylene bottle at the scene of the explosion in Footscray. ( ABC News )

Witness Breann King said it was pretty chaotic at the scene.

"An explosion, just a massive explosion. It was huge, you could feel it. You could feel it," she said.

"There was one ambulance already there, there were police cars coming up, many police cars coming.

"It's normally pretty quiet here. It was very loud, no one expected it. There was a lot of people on the street, no one expected it."

Another witness, Tristan Baragwanath, said the explosion sounded like a "close gun shot" from where he lives about a kilometre away.

"Something bad's happened. A lot of neighbours came out at the same time," he said.

"No-one really knew what was going on."

Fire crews and ambulance officers at the scene. ( Audience submitted: Celia Tran )

Daniell Flood was at work at the Snuff Puppets in the Footscray Drill Hall when the explosion happened.

"All the windows in the area exploded," he said.

"I was right near the window in the office kitchen and the whole window just exploded in.

"Every window in the Footscray Drill Hall exploded. All the fluorescent lights are on the floor."

Mr Flood said the truck doors were blown 70 metres from the scene of the crash.

"It shook the whole building. I've got glass in my mouth and all over my body. It was terrifying."

It was lucky there was little traffic around at the time, other than one ute, Mr Flood added.

"I'm guessing the ute was quite close and I saw the passenger in the ute and he was tended to by the ambulance staff. But he seems to be alright," he said.

'I thought maybe it was a bomb'

Nicholas, who was also at the scene, said he thought there had been a terrorist attack.

"My first reaction was I thought maybe a bomb had exploded at the back of me," he said.

The truck ran into the wall of the house where Russell Bannister lives.

"I heard probably what sounded like the loudest explosion I've heard in a long time. And I instantly looked out my window and I saw a truck there, so I knew what happened and I ran out the front," he said.

"Someone was inside the truck and he was in a pretty bad way.

"Then we saw fuel was leaking and so we kind of stepped back because there were power lines and everything there."

Emergency service staff said the area is cordoned off and people are advised to stay away.