The incident left 20 people injured.

It's believed the original blaze broke out at the Loafers' Lodge in Newtown soon after midnight local time (10pm AEST), reports 9 News.

"It is a truly tragic situation, the worst outcome," Wellington Mayor Tory Whanau said.

Police have not commented on the fire publicly.

"There's a risk of the roof caving in and, of course, we need to make sure that our firefighters are protected as well," Whanau said.

According to Stuff, a number of people still remain unaccounted for.

There were about 94 people in the hostel at the time of the fire, the property manager told Stuff.