It was not immediately clear whether there were any casualties and details of the incident were sketchy.

A strong explosion could be heard in parts of the sprawling city followed by smoke. An official with the National Emergency Management Agency (NEMA) said initial information was that a shop storing fireworks had caught fire.

"NEMA has mobilised response agencies and volunteers to an explosion in a building suspected to be loaded with (fireworks) in the Jankara area of Lagos," agency spokesman Yushau Shuaib said in a statement.

"Search and rescue officers of NEMA having hectic time to reach the place due to traffic and crowds."

The incident occurred in the Lagos Island area, among the oldest and most densely packed neighbourhoods in the city of some 15 million people.

Fireworks are popular in Nigeria during the Christmas and New Year holidays.