The quake struck at 0634 GMT about 91km (56 miles) north-east of the city of Concepcion and 317km south-west of the capital, Santiago.
Buildings in Santiago were reported to have shaken for between 10 and 30 seconds, with the loss of electricity and communications.
The US issued an initial tsunami warning for Chile, Peru and Ecuador.
That was later extended to Colombia, Antarctica, Panama and Costa Rica.
Japan's meteorological agency has warned of a potential tsunami across large areas of the Pacific.
The US Geological Survey (USGS) said: "An earthquake of this size has the potential to generate a destructive tsunami that can strike coastlines near the epicentre within minutes and more distant coastlines within hours."
There is no information yet on any casualties.
The USGS said the earthquake struck at a depth of about 35km.
Telephone lines and internet connections appear to have been damaged.
Chilean officials say there is very little information yet from near the epicentre and they have warned people to stay at home.
One journalist speaking to Chilean national television from the city of Temuco, 600km south of Santiago, said many people there had left their homes, determined to spend the rest of the night outside. Some people on the streets were in tears.
Mark Winstanley, who contacted the BBC from Vina del Mar, 100km north-west of Santiago, said buildings had shaken and electricity and phone connections were cut but he could see no structural damage yet.
A university professor in Santiago, Cristian Bonacic, said that this was a massive quake but that the cities seemed to have resisted well. Internet communications were working but not mobile phones.
Chile suffered the biggest earthquake of the 20th century when a 9.5 magnitude quake struck the city of Valdivia in 1960, killing 1,655 people.