The Japanese government has announced an emergency shutdown at a nuclear reactor.
At least 32 people have died following 19 aftershocks and tsunami waves measuring up to 10 metres in height.
And Reuters have reported that a ship carrying more than 100 people was swept away by the tsunami.
Japan declared the nuclear emergency because of a leak of radioactive material following a failure in the cooling system at the reactor on the country's east coast.
The huge earthquake which ripped across Japan today unleashed a 13-foot tsunami that swept boats, cars, buildings and tons of debris miles inland, and warnings were issued to all countries with Pacific coastlines to be ready for it to hit them.
Experts said the tsunami wave could be higher than many small Pacific islands.
In Japan the initial official death toll was put at less than 20 but reports were fragmented as the country struggled to deal with the catastrophe.
The quake's epicentre was hundreds of miles from Tokyo but there were reports buildings had collapsed in the capital.
Elsewhere fires triggered by the quake were burning out of control up and down the coast, including one at an oil refinery.
The US Geological Survey said the quake was a magnitude 8.9, while Japan's meteorological agency measured it at 8.8.
It struck at 2.46pm local time (5.46am GMT) and was followed by more than a dozen aftershocks, including several at least 6.3, the size of the quake that struck New Zealand recently.
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The quake was the largest to hit Japan since records began 140 years ago.
It was followed by at least 19 aftershocks, most of them of more than magnitude 6.0. Dozens of cities and villages along the 1,300-mile stretch of the country's eastern shore were shaken by violent tremors.
"The earthquake has caused major damage in broad areas in northern Japan," Prime Minister Naoto Kan said.
Even for a country used to earthquakes, this one was of horrific proportions.
Large fishing boats and other sea vessels rode high waves into the cities, slamming against bridges. Upturned and partially submerged vehicles were seen bobbing in the water.
Waves of muddy water swept over farmland near the city of Sendai, carrying buildings, some on fire, inland as cars attempted to drive away.
Sendai airport was inundated with vehicles and thick mud deposited over its runways. Fires spread through a section of the city.
The tsunami roared over embankments, washing cars, houses and farm equipment inland before reversing direction and carrying them out to sea. Flames shot from some of the houses, probably from burst gas pipes.
"Our initial assessment indicate that there has already been enormous damage," a government spokesman said. "We will make maximum relief effort based on that assessment."
He said the Defence Ministry was sending troops to the quake-hit region.
Japan's worst previous quake was in 1923 in Canto, an 8.3-magnitude shock that killed 143,000 people. A 7.2-magnitude quake in Kobe city in 1996 killed 6,400 people.
Several nuclear plants along the coast were partially shut down, but there were no reports of any radioactive leaks.
A large fire erupted at the Cosmo oil refinery in Ichihara city near Tokyo and was burning out of control with 100-foot flames whipping into the sky.
The US Geological Survey said the quake was the biggest to hit Japan since officials began keeping records in the late 1800s.
It struck at a depth of six miles, about 80 miles off the eastern coast.
In central Tokyo, 240 miles away, large buildings shook violently and workers poured into the street for safety.
The tremor bent the upper tip of the Tokyo Tower, a 1,093-foot steel structure inspired by the Eiffel Tower in Paris.
Trains were stopped and passengers walked along the tracks to platforms. More than four million buildings were without power in Tokyo and its suburbs.
Crowds waited at Tokyo's Shinjuku station, the world's busiest train station, for service to resume so they could go home. TV announcers urged workers not to leave their offices to prevent injuries in case of more strong aftershocks.
Osamu Akiya, 46, was working in Tokyo at his office in a trading company when the quake hit.
It sent bookshelves and computers crashing to the floor, and cracks appeared in the walls.
"I've been through many earthquakes, but I've never felt anything like this," he said. "I don't know if we'll be able to get home tonight."
Thirty minutes after the main quake, tall buildings were still swaying in Tokyo and mobile phone networks were not working. Japan's Coast Guard set up a task force and officials were standing by for emergency contingencies.
Tokyo's main airport was closed. A large section of the ceiling at the terminal at Ibaraki, about 50 miles outside Tokyo, collapse.
Dozens of fires were reported in northern districts of Fukushima, Sendai, Iwate and Ibaraki. Collapsed homes and landslides were also reported in Miyagi.
Japan lies on the "Ring of Fire" - an arc of earthquake and volcanic zones stretching around the Pacific where about 90% of the world's quakes occur, including the one that triggered the December 26, 2004, Indian Ocean tsunami that killed an estimated 230,000 people in 12 nations.
A magnitude-8.8 tremor that shook central Chile last February also generated a tsunami and killed 524 people.