A funicular has derailed in central Lisbon , smashing into a building, killing at least three people and leaving the city "in mourning".

Authorities said about 20 people were injured and several people were trapped inside the Elevador da Gloria in the Portuguese capital when it crash about 6pm on Wednesday (3am Thursday AEST).

Police told CNN Portugal three people had died and paramedics said three seriously injured people were taken to hospital.

Live footage on local TV showed the emblematic bright yellow carriage completely destroyed, surrounded by firefighters.

Videos shot by bystanders showed a huge cloud of dust and people running towards the accident.

Several injured people were carried away from the crash, which took place on Wednesday afternoon (early Thursday AES

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