Police and ambulance staff looking at the remains of two vehicles after a gas explosion in lower Clyde St, Invercargill this afternoon.

Two people have been hospitalised after a large explosion in central Invercargill.

The explosion rang out across the Invercargill CBD from Clyde Street about 3pm and emergency services rushed to the scene.

A police spokesman said it was a gas bottle explosion outside Southern Brakes and Driveline Ltd. It blew out windows at several premises.

A witness said he saw a man lying on the ground after the explosion. The man's eyes were open and he was talking to bystanders, but he looked in ''bad shape'', the witness said.

Two people have been taken to hospital and the extent of their injuries is not known.

It is understood that the gas bottle was on the back of a Downer ute.

Nearby businesses reported their premises were shaken by the blast, and some thought a bomb had gone off.

A cordon runs from Tweed St to Balmoral Dr to keep people away.

Police said the gas bottle could potentially explode again. Firefighters remain at the scene hosing down the area, where the explosion happened.

The witness said there were a lot of people on the road and emergency services were outside Southern Brakes and Driveline Ltd.

No further details are available.