A summer street festival in Toronto descended into chaos Saturday night after a gunman opened fire into the crowd, leaving two people dead and three others wounded.

Panicked revelers fled for safety as police launched an urgent hunt for the shooter.

The deadly gunfire erupted during the popular Salsa on St. Clair festival, transforming what had been an evening of live music, dancing and celebration into an active crime scene.

Toronto Police confirmed officers were called to reports of a shooting at 8:12pm near the intersection of St. Clair Avenue West and Arlington Avenue, where thousands had gathered for the annual cultural event.

When officers arrived, they discovered five people suffering from gunshot wounds.

Two victims were pronounced dead at the scene while three others were rushed for medical treatment, although authorities have not yet released details about the extent of their injuries.

Toronto police are investigating the shooting as an active shooter incident and continue to search for the suspect (file photo)