According to reports at least 200 others have also been treated in hospital after the blaze ripped through the Kiss Nightclub in the city of Santa Maria in Rio Grande do Sul.
Estimates in local media claim that up to five hundred people were in the club at the time.
The fire reportedly began when the singer of a band performing let off fireworks.
According to some reports the sound proofing of the building caught fire and the victims died from smoke inhalation. Thick toxic smoke is said to have quickly filled the club.
A local governor tweeted today, "Sad Sunday. We are taking appropriate action and possible. I'll Be in Santa Maria in the late morning."
Firefighters confirmed all the deaths were due to smoke inhalation.
"We have just taken the fire under control," Colonel Silvia Fuchs of the local fire department was quoted by Reuters as saying.
"Now we are removing the bodies."
The building reportedly only had one emergency exit, and firefighters had to make a hole in the wall to help people escape.
The total number of victims is also still unknown and there may be hundreds injured, Civil Police and regional government spokesman Marcelo Arigoni told Radio Gaucha.
He told the radio a truck carrying 70 bodies had arrived at the Municipal Sports Centre, which was being used as an improvised morgue. Police believe there are about 20 bodies still inside the club.
The fire appeared to be among the deadliest in a nightclub since a 2004 fire killed 194 people at an overcrowded working-class nightclub in Buenos Aires, Argentina.
A blaze at the Lame Horse nightclub in Perm, Russia, broke out on Dec. 5, 2009, when an indoor fireworks display ignited a plastic ceiling decorated with branches, killing 152
A nightclub fire in the U.S. state of Rhode Island in 2003 killed 100 people after pyrotechnics used as a stage prop by the 1980s rock band Great White set ablaze cheap soundproofing foam on the walls and ceiling.
A welding accident reportedly set off a Dec. 25, 2000, fire at a club in Luoyang, China, killing 309.