The blast occurred after a leak at a bakery at 9 a.m. local time on Saturday. A police spokeswoman told CNN there are victims, adding it is too early to say how many.
Pictures from the scene showed smashed windows and scattered debris across the street, as fire crews evacuated people from apartments above the bakery.
French Interior Minister Christophe Castaner, who visited the scene with Prime Minister Edouarde Philippe and the city's mayor Anne Hidalgo, said on Twitter that the toll of victims "will be heavy."
More than 200 firefighters are responding to the incident, Castaner wrote. "My first thoughts go to those injured and their loved ones," he added.
Police advised the public to stay away from the area, on Rue de Trevise in the 9th arrondissement of the French capital, and to make space for emergency vehicles.
CNN's Saskya Vandoorne and Arnaud Siad contributed to this report.