Two people have died and 20 people injured after a small van crashed into a crowd outside a popular bar in the German city of Münster.

German police confirmed the driver shot himself dead after the crash close to the Kiepenkerl statue in the city's old town.

Interior minister Herbert Reul said two people were killed in the crash, revising an earlier police figure of three.

He described the driver as a German citizen and said "nothing speaks for there being any Islamist background."

The Sueddeutsche Zeitung paper reported the driver is believed to be a middle-aged man who had psychological issues and said the suspect's apartment was being searched for possible explosives.

Police spokesman Andreas Bode said a suspicious object was found inside the van and were investigating it.

Authorities meanwhile said they were checking witness reports other perpetrators may have fled from the van.

Police previously said they were not looking for other suspects.

Police said six of the 20 injured in the crash were in serious condition.

German Chancellor Angela Merkel says she is "deeply shocked by the terrible events in Münster."

In a statement, Merkel said: "everything conceivable is being done to investigate the crime and to support the victims and their relatives.

"My thanks go to all the responders at the scene."

Mayor Markus Lewe told reporters that "all of Münster is mourning this horrible incident. Our sympathy is with the relatives of those who were killed. We wish the injured a quick recovery".

Police had urged people to avoid the area near the Kiepenkerl, a popular pub in the downtown area, as reports spread of the van crash.

"Please avoid the area around the Kiepenkerl. We are on site," the police tweeted.

"#Kiepenkerl There are dead and injured. Please avoid the area."