An earthquake of magnitude 7.4 struck Vanuatu's capital Port Vila on Tuesday, damaging buildings and cars with at least one person reported killed.

Vanuatu state broadcaster VBTC showed footage of vehicles crushed in a building collapse on a street lined with retailers.

The broadcaster reported one person had been trapped in a collapsed building.

Police said at least one person had been killed and injured people had been taken to hospital.

The road connecting Port Vila to the international shipping terminal was blocked by landslides, officials added.

Other footage posted on social media showed buckled windows and collapsed concrete pillars on a building hosting foreign missions in the capital, including the US, British, French and New Zealand embassies.

A spokesperson for the US Embassy in Papua New Guinea said its embassy in Port Vila had sustained "considerable damage" and was closed until further notice.

New Zealand's High Commission building, which is co-located with the US, French and British missions, had "sustained significant damage," a foreign ministry spokesperson said in a statement.

There were communications outages across the country, the New Zealand statement added, while the Australian High Commission in Vanuatu said its communication systems had also been affected.

The earthquake occurred at a depth of 57 kilometres and was centered 30 kilometres west of Port Vila, the largest city in the Pacific island nation.

Half a dozen aftershocks hit Vanuatu following the initial quake, USGS data showed.

"There was one that had us all sort of perched and ready to move again. But none of them have been anywhere near as bad as the initial shock," he said.

Earlier, the US Tsunami Warning System cancelled an initial tsunami warning for Vanuatu.

Authorities in the US, Australia and New Zealand said there was no tsunami threat to their territories.

Australia's Foreign Minister Penny Wong said Australia was closely monitoring the situation following the "devastating earthquake". (Reuters)