At least one person is dead and as many as 10 others are wounded, more causalities expected, German media is reporting.
Police have sealed off the area around Eugene’s Wine Bar, the Nordbayern.de news website reported.
Bavarian Interior Minister Joachim Herrmann is on his way to the scene.
The interior ministry said that the explosion appeared to have been intentional, contradicting initial reports that suggested it might have been a gas explosion.
The city’s central square is packed with emergency vehicles and a town house is being used as an operations centre, the report added.
The incident comes amid tension following other bloody events in Germany over the past week.
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