Russia's Federal Security Service said a fire broke out at 1300 GMT when soldiers attempted to decommission munitions at navy Arsenal No. 31 on the outskirts of Ulyanovsk, a city of 625,000 people, 800 km southeast of Moscow.
The fire raged for at least five hours, lighting up the evening sky above the city, said a Reuters witness who added the windows of houses several kilometers away were shattered by the force of the blasts.
Witnesses compared the blast to a giant firework display, visible from 15 km away. At least 400 firefighters battled the flames for hours. At least two military firemen were killed, according to the Defence Ministry.
A Defence Ministry spokesman added that seven were wounded. Prime Minister Vladimir Putin ordered officials to ensure civilians were properly evacuated.
Ulyanovsk Governor Sergei Morozov said more than 40 people who had been feared dead had been found alive and well in a bomb shelter at the depot.