A man has died after a van exploded in Melbourne's south-east this morning.

The 25-year-old man died in hospital after a van exploded in front of a house in Stadium Circuit at Mulgrave at 6:45am (AEDT).

It is believed the man was refrigeration mechanic.

Neighbours have described hearing a bang like a car backfiring and loud screaming.

Ambulance Victoria spokesman Paul Bentley says the man suffered significant blast-type injuries.

He says rubble from the blast has been strewn across the street a number of houses have been damaged.

"Houses across the street have lost windows and walls have been blown in," he said.

"A ladder thought to be from the van is probably about ten metres from the van itself."

Metropolitan Fire Brigade spokesman Andrew O'Connell says it appears the blast was caused by a leak in a gas bottle inside the van.

He says the man was thrown from the vehicle by the force of the explosion.

"These gases have an enormous power when they catch fire and explode in a confined space."

He says up to 20 homes have been damaged.

"We've got 15-20 homes with significant damage to windows, eaves linings and debris from the actual vehicle itself has been pushed probably 200-300 metres in a circumference from the vehicle."

Mr O'Connell says it is lucky no-one else was hurt.

"At that time of the morning most people tend to be inside their homes and there was no one going past," he said.

"It could easily have been a much worse scenario if it happened at 8:30 or 9:00 in the morning."

Detective Senior Constable Mick Cashman says the van contained about half a dozen gas cylinders.

"We have heard some feedback from witnesses that they have heard some hissing from the rear of the vehicle," he said.

Mulgrave resident Peter Wilson says the blast rattled the windows at his house about a kilometre away.

"It was a single explosion that reverberated right around the Mulgrave area and apparently it was heard up as far as Ferntree Gully," he said.

"That was a shock wave that actually shook the windows of our bedroom."