The Prime Minister says some of the people who were believed to be on White Island during the eruption are unaccounted for.
Police were alerted at 2.17pm of the eruption of White Island (Whakaari), off the coast of Whakatāne.
Jacinda Ardern said that it remains an evolving situation.
She initially said it was thought about 100 people were on or around the island, but police released a statement shortly after saying it is now thought to be fewer than 50.
"Some are unaccounted for," she told media at 4pm during her weekly post-Cabinet meeting press conference.
"A number of people are injured and being transported to shore," she said.
Director of operations for St John Norma Lane told 1 NEWS seven helicopters were on their way and there were up to 20 casualties, but "there could be more".
Ms Ardern called it a "significant issue" due to the scale of those affected.
She said her thoughts were with those people and their families.