A manhunt is under way for a gunman believed to have been dressed as Santa who killed at least 39 people in a New Year nightclub attack in Istanbul.

Another 69 people were wounded in the armed rampage, which Istanbul's governor described as a "terrorist attack".

At least 16 foreign nationals were among the dead at the club which was popular with tourists, the Turkish interior ministry said.

The gunman killed a policeman and civilian outside the Reina nightclub before opening fire at random inside the building, packed with 600 people celebrating the New Year.

"The search for the terrorist continues... I hope (the assailant) will be captured quickly, God willing," said interior minister Suleyman Soylu. "This was a massacre, a truly inhuman savagery."

One reveller told how she had to lift dead bodies off her to escape the building after the attack at 1.45am local time on Sunday.

Sinem Uyanik said she saw several bodies inside the club and her husband Lutfu Uyanik was wounded.

"Before I could understand what was happening, my husband fell on top me," she said. "I had to lift several bodies from on top of me before I could get out."

The Department of Foreign Affairs and Trade has updated their travel advice for Turkey, stating that Irish citizens should "avoid the area, follow local security advice, and exercise extreme caution."

The DFAT also urged those in Istanbul to let family and friends know if they are ok, or if they need assistance to contact the Department on (003531) 408 2000 or 0090 312 459 1000.

The White House condemned the "horrific" attack, stating: "That such an atrocity could be perpetrated upon innocent revellers, ay of whom were celebrating New YEar's Eve, underscores the savagery of the attackers."

"Terrorists will not prevail in destabilising democracy"

Minister for Foreign Affairs Charlie Flanagan has condemned the incident, calling it a "heinous violent attack".