Lancashire Police said they were called to the scene of the explosion in Heysham at 2.40am on Sunday after reports that “a number” of houses on Mallowdale Avenue had collapsed.
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The force later confirmed the death of a child, adding that two people were also seriously injured.
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In a statement on Twitter, police said: “We remain at scene of a suspected gas explosion on Mallowdale Ave Heysham which has caused 2 houses to collapse & badly damaged another.
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Earlier, the force said officers were at the scene along with colleagues from Lancashire Fire and Rescue and North West Ambulance Service.
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“Sadly, we can now confirm a young child has died & 4 other people have been injured, 2 seriously. Our thoughts are with all those affected.”
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“A safety cordon has been put in place and nearby residents have been evacuated,” they said."
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Several residents of the area tweeted that up to three houses had collapsed, and emergency services sirens had been heard near the scene for a prolonged time.
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“A major incident has been declared after we (were) called to terraced houses on Mallowdale Avenue. It has been reported that there has been an explosion at a property and firefighters are searching the collapsed property,” it said.
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Lancashire Fire said on Twitter that 10 units were called to the terraced row and firefighters were searching a collapsed property.
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Emergency workers use a sniffer dog at the scene