The deadly earthquake that struck 90 kilometres north of Christchurch on Sunday night has been followed by hundreds of aftershocks.

GeoNet, which monitors seismic activity in New Zealand, said: "We can say one thing with certainty: there will be more earthquakes to come in this area."

About 10 hours after the huge quake hit, GeoNet had recorded 232 aftershock events. One of those tremors was of 6.1 magnitude. By noon AEDT close to 300 shocks had been recorded.

Caroline Little, a spokeswoman for GeoNet, told Fairfax Media that the agency was "pretty confident" the initial earthquake was two seismic events about 50 kilometres apart.

It is the largest earthquake recorded in New Zealand since 2009.

A statement from GeoNet said: "It looks like we've got two separate but related quakes going on. Our reports indicate that the combination of these two quakes lasted two minutes, with the most severe shaking at around 50 seconds." 

An earthquake with a magnitude of 7.8 struck the South Island of New Zealand, killing two and cutting power to some parts of the country. The quake triggering a tsunami warning along the entire east coast, which was later downgraded.

In discussing fatalities New Zealand Prime Minister John Key told reporters in Wellington that: "We don't have any indications at the moment to believe it will rise, but we can't rule that out."

Key added that details of the casualties were still being confirmed.

He said a military helicopter was being dispatched to the coastal tourist town of Kaikoura, near the epicentre of the 7.8 magnitude quake, some 91 km (57 miles) north-northeast of Christchurch in the South Island.

Tsunami gauges at Kaikoura, 180 kilometres north of Christchurch, had recorded "a sizeable tsunami wave of around 2.5 metres", weatherwatch.co.nz reported about three-and-a-half hours after the quake struck.

"The tsunami gauges suggest perhaps an underwater landslide just off the Kaikoura coastline," weatherwatch said on its website. 

The quake, located 20 kilometres south-east of Hanmer Springs at a depth of 23 kilometres, struck just after midnight on Sunday and was felt as far away as Auckland.

The Ministry of Civil Defence and Emergency Management issued a tsunami warning for the South Island and later extended it for the entire east coast.  

The warning was later scaled back, reducing the area where such an event was likely to hit the coast.

Anna Kaiser, a seismologist at GNS Science said a tidal signal or surge of up to one metre had been recorded in North Canterbury region of the South Island.