Emergency services, including a hazardous area response team and ambulance crews, remain at the scene.
Hinckley Road between Mostyn Street and Carlisle Street has been closed off, while businesses and homes in the immediate vicinity have been evacuated.
A spokeswoman for the Leicestershire Fire and Rescue Service said six fire engines had been requested.
Four people were taken to Leicester Royal Infirmary, East Midlands Ambulance Service said, all of whom are in a “critical condition”.
People are being urged to attend A&E only if “absolutely necessary”.
The fire and rescue service spokeswoman said: “This is a search and rescue at the moment. It is unknown if people are injured or trapped.”
She added that the affected property was a two floor building with a loft conversion that had suffered a “pancake collapse”.
Pictures and videos posted on Twitter showed flames leaping into the sky above the city.
It is believed that a convenience store and a house were destroyed in the blast.
Speaking to Sky News, Kat Pattinson who lives on the same road as the fire, said: “We are down the same street – about 500 metres from where the blast has taken place and our whole house shook.
“We checked on our children first and foremost and then we went outside.
“There is just an awful lot of smoke here at the moment and the whole area is cordoned off.”
She added that the shop on fire is usually open until about 9pm on a Sunday, and has a flat above it.
The building appears to have stood next to a shop called TJ’s Takeaway.Leicester Police said in a statement: “The cause of the explosion will be the subject of a joint investigation by the police and Leicestershire Fire and Rescue Service.
“We would ask that the media and public do not speculate about the circumstances surrounding the incident but at this stage there is no indication this is terrorist related.”
The electricity supply has been cut off for a number of properties in the Hinckley Road area.
