Updated 9.02am

Six people were killed and more than two dozen were injured Friday by a blaze that ripped through the site of a luxury hotel being built in South Korea's port city of Busan, the National Fire Agency said.

The fire started just before 11:00 am (0200 GMT) at the site of the Banyan Tree Hotel, authorities said.

Around 100 workers were present when the blaze erupted, a National Fire Agency official told AFP.

It is believed to have started on the first floor of the construction site where workers had stored insulation materials, a fire department official told reporters.

Twenty-five people were injured, a public health department official said, adding that most were minor injuries caused by smoke inhalation.

"The fire had already reached its peak by the time we arrived and thick black smoke was covering the scene," Busan Gijang Fire Station chief Hong Mun-sik told reporters.

"There were many flammable materials blocking the entrance," Hong said.

South Korea's acting president Choi Sang-mok ordered officials to "fully mobilise all available personnel and equipment to extinguish the fire," according to the finance ministry.

"Every effort must be made to prevent casualties during search and rescue operations, while also ensuring the safety of firefighters," Choi said.

The fire was brought under control around 1:30 pm.