Buildings and houses have collapsed, amid unconfirmed early reports of deaths with many others potentially trapped inside buildings.
Along the main streets of Christchurch, the facades of entire buildings have collapsed onto the streets amid chaotic scenes.
While the extent of damage is not yet known, the US Geological Survey has rated the event as of 6.3 magnitude.
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It says the quake lasted about a minute with the epicentre near Christchurch.
Some reports suggest it should be considered as an aftershock to the 7.1 magnitude quake that hit on September 4, but some have described that event as a "tea party " compared to the latest disaster.
The city is now suffering a string of major aftershocks as the search for survivors begins.
The airport is closed, while the city's main hospital is being evacuated.
Live TV showed a short time ago rescue workers pulling what appeared to be a lifeless woman from the rubble.
Cars are also crushed where they stood, while footpaths and roads have been left crumpled.
Mayor says people have been injured in city council building.
Christchurch mayor Bob Parker says there are reports of serious injuries from the quake, including people trapped in a city council building.
But he's heard reports of other serious injuries throughout the city.
Cr Parker has told Radio New Zealand it felt like a whole new earthquake, not just an aftershock of the 4 September 7.1 quake. "It was very, very strong," he says.
But as he urged people not to drive, given the state of the roads, many were desperately trying to reach their families or escape from the city, causing gridlock.
In the midst of the chaos, emergency crews are scrambling to respond to the emergency.
Radio New Zealand listeners report water cylinders leaking in houses, whole houses ruined and contents devastated.
People have thronged onto the streets of the city centre. There are fresh piles of rubble everywhere.
Labour Party leader Phil Goff, who is at the airport, says people around him were terrified. He says he has never been in a quake so big before.
Civil Defence Minister John Carter says said its emergency procedures have been activated and the Civil Defence chief John Hamilton is heading to the scene.
Telephone services have been severely disrupted, bridges are impassable, and significant areas are now affected by flooding and mud triggered by burst watermains.
Buildings are down all around Cathedral Square in the city, while the Christchurch Cathedral has suffered massive damage and is virtually destroyed.
The priest in charge feared there were people trapped under the rubble, while at least one person could be seen trapped in a window frame on a live TV broadcast.
Amid chaotic scenes and the wail of sirens in the city centre, one Christchurch worker Julian Hobday told Sky News he felt lucky to survive as the apartment store he was in was severely rocked
"It was just horrific," he said.
"The previous one was just tea party stuff compared to this," Mr Hobday said.
"I hate to think what it will be like when I get home."
“It was incredibly violent, very very scary,'' one visitor to the city, Philip Gregan told AAP over the phone.
“We're all standing out on the street with sirens going off around us.
“Oh no, there's another one,'' he said while on the phone. “I want to get out of here.''
Witness Kay Cowlishaw said there was descruction everywhere.
"There's just water pouring out and sewerage, the whole garage is filled with water. There are cracks in the road."
The quake struck at 12.51pm New Zealand time, or 10.51am Melbourne time.
Twitter users have reported feeling the quake as far as Wellington and Dunedin, with the violent episode lasting at least a minute and rocking buildings.
The event has also cracked roads, burst water mains and rocked items from shelves.
The epicentre of the devastating 7.1 earthquake that hit Christchurch on September 4 last year was 40km west of the city at a depth of 10km.
The city, New Zealand's third largest, has been shaking regularly since, with aftershocks up to 5.1 magnitude recorded.
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