New Zealand media reported that there had been "multiple" fatalities at several locations after the quake hit around 12.51 pm local time five kilometres from the city at a depth of just four kilometres.
New Zealand Prime Minister John Key said that there were fears of deaths after the quake which caused widespread damage, and residents are being warned to expect aftershocks.
Christchurch's mayor declared a state of emergency, saying it was a "black day" for the city.
Live video footage showed parts of buildings collapsed into the streets, which were strewn with bricks and shattered concrete.
Footpaths and roads were cracked and split, and hundreds of dazed, screaming and crying residents wandered through the streets as sirens blared throughout the city.
The TV footage showed onlookers clinging to each other and others bleeding and limping, many searching for loved ones and trying to reach trapped people.
People fled the city centre as emergency services rushed to the area to evacuate those trapped in buildings.
Local police said that there were multiple fatalities in the city, including an accident in which two buses had been crushed by falling buildings.
A police statement said there were reports of fires in the city and people being trapped in buildings.
The airport was closed and Christchurch Hospital was evacuated. Power and telephone lines were knocked out, and pipes burst, flooding the streets.
Some cars apparently parked on the street were buried under rubble.