A gunman shot his way into an Istanbul nightclub packed with New Year's revellers early on Sunday, killing at least 39 people and wounding almost 70 others in what the provincial Governor described as a terrorist attack.

Key points: Istanbul city governor condemned the "terrorist attack" on the popular Reina nightclub

Istanbul city governor condemned the "terrorist attack" on the popular Reina nightclub Around 500-600 people were thought to be in the club when the attack happened

Around 500-600 people were thought to be in the club when the attack happened The attacker was believed to have entered the premises dressed as Santa Claus, local media reported

The assailant shot a police officer and a civilian as he entered the Reina nightclub before opening fire at random inside.

"A terrorist with a long-range weapon… brutally and savagely carried out this incident by firing bullets on innocent people who were there solely to celebrate the New Year and have fun," Governor Vasip Sahin told reporters at the scene.

Turkish Interior Minister Suleyman Soylu said the attacker was still at large and 69 people were being treated in hospitals following the shooting.

Mr Soylu said of the victims identified so far, 16 were foreign nationals. He did not provide any information on their countries.

In a statement, President Tayyip Erdogan said that Turkey would fight to the end against all forms of attack by terror groups and their backers.

"As a nation, we will fight to the end against not just the armed attacks of terror groups and the forces behind them, but also against their economic, political and social attacks," he said.

"They are trying to create chaos, demoralise our people, and destabilise our country with abominable attacks which target civilians ... we will retain our cool-headedness as a nation, standing more closely together, and we will never give ground to such dirty games," he said.

'I had to lift several bodies from on top of me'

Around 500-600 people were thought to have been in the club when the attack happened at around 1:15am local time, broadcaster CNN Turk said.

The club lies on the shore of the Bosphorus Strait in the Ortakoy district, and some jumped into the water to save themselves and were being rescued by police.

Police with riot gear and machine guns backed up by armoured vehicles blocked the area close to the Reina nightclub.

Sorry, this video has expired Ambulances ferry the injured to hospital after the attack (Image: AP/Depo)

Witness Sinem Uyanik, whose husband Lutfu Uyanik was wounded in the attack, told AP she saw several bodies inside the nightclub.

"Before I could understand what was happening, my husband fell on top me," she said outside Istanbul's Sisli Hospital.

"I had to lift several bodies from on top of me before I could get out."

The Reina Night Club in sits on the Bosphorus River. ( Depo Photos/AP, file photo )

The attacker was believed to have entered the nightclub dressed as Santa Claus, private NTV television reported earlier.

Broadcaster CNN Turk initially said the attacker was thought still to be inside the building and that police special forces were preparing to raid it. NTV said the attacker's whereabouts were unclear.

Dozens of ambulances and police vehicles were dispatched to the club in Ortakoy, a cosmopolitan neighbourhood nestled under one of three bridges crossing the Bosphorus, and home to clubs, restaurants and art galleries.

DFAT determining if any Australians involved

The Department of Foreign Affairs said the Australian embassy in Ankara was liaising with local authorities to determine if any Australians were caught up in the attack.

Reina is one of Istanbul's best-known nightclubs, popular with locals and tourists alike.

Security measures had been heightened in major Turkish cities, with police barring traffic leading up to key squares in Istanbul and the capital Ankara. In Istanbul, 17,000 police officers were put on duty, some camouflaged as Santa Claus and others as street vendors, Anadolu reported.

A police armoured vehicle blocks the road leading to the scene of a nightclub shooting. ( AP )

Ankara and Istanbul have been targeted by several attacks in 2016 carried out by the Islamic State (IS) group or Kurdish rebels, killing more than 180 people.

Turkey, part of the US-led coalition against IS, faces multiple security threats including spill-over from the war in neighbouring Syria.

It has seen repeated attacks and bombings blamed on IS as well as Kurdish militants in recent months.

US President Barack Obama "expressed condolences for the innocent lives lost", and said assistance would be offered to Turkish authorities.

Turkish Justice Minister Bekir Bozdag vowed that his country would press ahead with its fight against violent groups.

"Turkey will continue its determined and effective combat to root out terror," Mr Bozdag said on Twitter.



Police secure the area around the nightclub. ( Reuters: Osman Orsal )

ABC/wires