According to the BBC, the fire began when a band on the stage started a fireworks display during their set. There was only one exit at the club, named Kiss.
Major Gerson de Rosa Ferreira, a senior police official overseeing military police rescue efforts at the scene, told Reuters that at least 159 of the bodies have been identified and removed from the club.
He explained that a majority of the victims had suffocated or been trampled.
Brazil's UOL news portal has reported that 48 are still hospitalized with varying injuries.
The night club had just one door, which caused a panic when the fire broke out. Firefighters said they had to open a large hole in the outside wall of the building in order to facilitate the rescue of those still trapped inside.
The nightclub had a capacity of up to 2,000 people, and according to a local reporter, cited by the BBC, it was full when the fire started.
Santa Maria, located at the southern tip of Brazil, near the borders of Argentina and Uruguay, is a major university city. It's population is about 250,000, the Associated Press reported.