The huge quake made buildings sway in Chile's capital Santiago, where terrified residents were seen gathering in streets to avoid falling debris.
Fifteen-foot waves struck the Chilean shore, flooding towns as people fled to higher ground.
The Chilean government has confirmed the death of five people, including a 20-year-old woman who was crushed by falling rocks. At least 20 more people have been injured.
If there is a tsunami, waves are expected to hit Hawaii shortly after 3am local time (9am EST) Thursday.
Authorities have begun ordering evacuations along the coast, including parts of Honolulu.
An alert has also been issued for San Onofre beach in California, although the National Oceanic and Atmospheric Administration said waves were unlikely to be higher than a foot.'
Officials warned: 'Tsunami capable of producing strong currents or waves dangerous to persons in or very near the water is expected.
'Currents may be hazardous to swimmers... boats... and coastal structures and may continue for many hours after the tsunami arrival. The first wave may not be the largest.'
Tthe quake's epicenter was about 34 miles west of Illapel. It struck around 7:54pm (6:54pm ET) and had a depth of 20.5 miles, according to a report by the US Geological Survey. It was felt as far away as Buenos Aires, Argentina.
Less than an hour after the initial earthquake, three aftershocks all greater than magnitude 6.1 struck the region.
Pictures posted on Twitter show a tsunami hitting the coast of Chile, with waves sweeping through streets.
Officials ordered people to evacuate low-lying areas along the 2,400 miles of Chile's Pacific shore, from Puerto Aysen in the south to Arica in the north.
Fishing boats headed out to sea and cars streamed inland carrying people to higher ground. Santiago's main airport was evacuated as a precaution.
People were seen standing on coastal hills near the epicenter, watching the water as they feared the worst.
New Zealand - 6,000 miles from the epicenter of the earthquake - was also bracing itself to be hit by the tsunami.
The powerful earthquake shook Chile's capital, causing buildings to sway and people to take refuge in the streets.
The Chilean government later confirmed that five people were killed, included a 35-year-old woman who was killed by a falling roof, a 20-year-old woman who was killed by falling rocks and a man in his 80s who had a heart attack.
More than a million people have been evacuated across the country.
Hawaii (file picture) is on alert after a tsunami warning was issued following a powerful 8.3 magnitude earthquake struck Chile
Authorities said some houses collapsed in the inland city of Illapel, about 175 miles north of Santiago.
The town's mayor, Denis Cortes, told a local television station that a woman had been killed in the city but declined to give any details. Electricity was knocked out, leaving residents in darkness.
'We are very scared. Our city panicked,' Cortes said.
Pictures shared on Twitter in the immediate aftermath of the quake showed collapsed ceilings and toppled shelves in supermarkets.
- Daily Mail Online
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