A powder keg explosion in central Mexico has killed three people and injured five others, local media reported on Monday.

The explosion occurred at noon when an illegal stash of gun powder or other explosive material used to make firecrackers ignited on the outskirts of Tultepec, a town famous for its fireworks industry in the State of Mexico.

State Governor Eruviel Avila told a security press conference on Monday that the blast also damaged several houses.

According to the daily Milenio, a local resident wrote on his Twitter account that he had "heard a powerful blast". "The expansive wave shook my office in Tultitlan," a bordering town of Tultepec, he said.

Avila asked the country's firecracker makers to legally manufacture explosive items in line with regulations and safety standards.