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A car bomb has exploded in central Berlin killing the driver in what may be a Mafia-style hit.

The huge blast shook the German capital at around 8am this morning.

"Our investigators believe it was an explosive device that caused the vehicle to explode," said Berlin police on Twitter.

A picture posted by the force showed the wreckage of a silver Volkswagen Passat estate on the street with its windows blown out and its front end smashed in.

(Image: Twitter/polizeiberlin) (Image: REUTERS)

The 43-year-old man killed in the blast was known to the police for drugs and violence offences, according to German newspaper BILD.

His car was registered to a woman in Berlin with a "Turkish-sounding" name, the paper added.

Police have ruled out terrorism and believe the "hit" is more likely linked to organised crime, it was claimed.

Residents in the western district of Charlottenburg were warned to close windows and stay indoors as investigations continued.

A short time later they were reassured the scene is safe.

(Image: EPA/PAUL ZINKEN) (Image: REUTERS)

Police initially thought the car had been destroyed as a result of a collision.

But investigations prompted the bomb squad to be called in and an explosives expert was seen examining the wreckage.

The car was driving through central Berlin when it crashed into a parked Porsche then exploded leaving the wreckage across the roadway.

The large bang was heard from several kilometres away, witnesses said.

An eyewitness told how the driver was able to get out of the car following the explosion and then collapsed in the road.

Marli Grunewald wrote on Der Tagesspiegel: "The car went out of control and collided with a parked Porsche.

"The driver is still got out and collapsed. People from the building next door began to resuscitate him.

"Shortly thereafter, several fire engines and ambulances arrived. Shortly after 8, a rescue helicopter.

"Debris spread over several metres down the street. I didn't see any other injured persons.

"But the bang was extremely noisy, I felt the shock in my apartment.

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"The hood has also been not torn. Only very dented.

"I am absolutely no expert, but it does not necessarily look like the engine compartment exploded.

"The car looks just all very battered. The man also had particularly bloody legs.

"It may be that the explosion came from underneath the car, purely speculative."

The homicide police division is investigating but the reasons behind the explosion remain unclear.