A powerful quake with a magnitude of at least 7.2 hit the Indonesian province of Aceh on Sunday, causing panic in an area that was devastated by the killer waves of the 2004 tsunami.

Coastal residents fled from their homes and headed inland fearing a destructive tsunami but officials said no casualties were reported, although one official said part of a school under construction collapsed.

The quake hit at 12:59 pm (0559 GMT) 66 kilometres (41 miles) southwest of Meulaboh on the Aceh coast on the island of Sumatra, according to the local Meteorological and Geophysics Agency.

The US Geological Survey put the magnitude at 7.4.

A local tsunami alert was issued by the Indonesian government but lifted about 90 minutes later.

The people of Aceh are still traumatised by memories of December 26, 2004, when the Indian Ocean smashed into the northern tip of Sumatra after a 9.3-magnitude quake split the seabed to the island's west.

An AFP correspondent in the provincial capital Banda Aceh said the ground shook for about three minutes on Sunday, sending people rushing from their homes and heading inland on motorcycles, cars and trishaws.

"This quake turned out not to be destructive. There's no report of damage to buildings, anyone injured or killed so far," Disaster Management Agency spokesman Priyadi Kardono told AFP.

"There were many people who panicked and fled their homes. They were just so afraid that a tsunami would happen again," he added.

Part of a school building which was under construction on the tiny island of Simeulue south of Meulaboh has collapsed, local chief Darmili said, adding that there were no reports of damage elsewhere.

Indonesia was the nation hardest hit in the 2004 tsunami, one of the world's deadliest natural disasters, with at least 168,000 people killed out of more than 220,000 who lost their lives across the region.

Indonesia sits on the Pacific "Ring of Fire," where the meeting of continental plates causes high volcanic and seismic activity, and is frequently rattled by quakes.

Sunday's quake off Meulaboh, which lies on the northwestern tip of Sumatra, struck at a depth of 30 kilometres (18 miles), the local agency said, while the USGS put the depth at 61 kilometres.

Meulaboh was near the epicentre of the 2004 quake and one of the hardest hit areas, with around 40,000 people killed and more than 50,000 people left homeless.

The killer tidal wave had flattened the coastal city, destroying houses, roads and bridges destroyed and bringing down power and telephone lines.

"Although there's no tsunami, Meulaboh residents had panicked and would stay alert. They're still outside, scared to return to their homes," West Aceh district deputy head Fuadri told AFP after Sunday's quake.

In neighbouring Malaysia, the Meteorological Department said tremors were felt in the west coast of peninsular Malaysia including the resort island of Penang.

A 7.8-magnitude earthquake hit Sumatra in early April, leaving about 17 people injured when some houses collapsed.

In September last year, a 7.6-magnitude quake killed about 1,000 people in the port of Padang, western Sumatra, in September last year.