Authorities issued a tsunami warning but later lifted it when Indonesia's Meteorology, Climatology and Geophysics Agency said monitoring showed no significant sea-level changes that would pose a threat to coastal communities.
The US Geological Survey said the quake hit Indonesia's Flores region with a depth of 10km at 4.58am (7.58am AEST) on Saturday.
Its epicentre was 70km north-northwest of the city of Ende in East Nusa Tenggara province. The initial quake was followed by several aftershocks.
East Nusa Tenggara police chief Rudi Darmoko said preliminary reports indicate two fatalities in Sikka Regency and three in Manggarai Regency as the earthquake caused severe damage and collapsed buildings.
He said power outages in cities and villages have hampered the flow of information and complicated search and rescue efforts.
"We are continuing to collect reports of damages and casualties, but there are communication disruptions," Darmoko said.
Footage on local television showed patients at several hospitals being evacuated from buildings as a precaution following the quake. Hospital staff moved equipment outdoors, including beds, IV stands and oxygen cylinders, and set up temporary treatment areas to adapt to emergency conditions.
The quake was felt across much of Flores island with initial reports indicating heavy damage.
Yohanna Embu, a resident of Sikka, a regency within East Nusa Tenggara province, said a number of buildings were damaged by the strong shaking and panicked people ran to higher ground.
"Many buildings here were damaged ... I saw that the waiting room at the port terminal in Maumere had collapsed," she said.
Students at St Peter Major Seminary in Sikka who were attending morning Mass fled in panic when the roof of an assembly hall collapsed, said the Reverend Guidelbertus Tanga, rector of the seminary, which is known locally as Ritapiret Seminary on the predominantly Catholic island of Flores.
"Our students and nuns ran out in panic beneath a collapsing roof," Tanga said.
"At least one priest suffered a broken leg after jumping from the second floor of a building during the quake."
Indonesian authorities initially issued a tsunami warning for parts of East Nusa Tenggara, West Nusa Tenggara, South Sulawesi and Southeast Sulawesi provinces, and urged residents to stay away from beaches and riverbanks, and residents on the coastline to move to higher ground.
The agency located the shallow undersea quake near Flores island.
Indonesia, a vast archipelago of more than 17,000 islands, is prone to earthquakes and volcanic activity because of its location on the "Ring of Fire," an arc of volcanoes and fault lines in the Pacific Basin.
A powerful earthquake caused a tsunami in 1992 that killed about 2500 people on Flores, part of a group of islands in the eastern half of Indonesia.
In 2018, a magnitude 7.5 quake spawned a large localised tsunami that wiped out coastal areas, while liquefaction caused by the shaking turned entire neighborhoods into rivers of sludge in the eastern Indonesian city of Palu, on the Palu-Koro Fault. The disaster killed more than 4400 people.
In 2010, a three=metre wave struck the Mentawai Islands, off the western coast of Sumatra in Indonesia, just minutes after a massive offshore earthquake. More than 400 people were killed and hundreds of homes were destroyed.
In December 2004, a massive magnitude 9.1 earthquake off Sumatra in western Indonesia triggered a tsunami that killed 230,000 people in a dozen countries.
