The government ordered the evacuation of coastal areas, anxious to avoid a repeat of a quake disaster in 2010 when authorities were slow to warn of a tsunami that killed hundreds.
"It's been awful. We ran out of the house with our grandchildren and now we are on a hill hoping it will be over soon," said Maria Angelica Leiva from the coastal town of Navidad.
"It is all very dark, and we just hope the sea hasn't reached our house," she said.
Wednesday's quake and heavy waves caused flooding in coastal towns, damaged buildings and knocked out power in the worst hit areas of central Chile and shook buildings in the capital city of Santiago about 280 km (175 miles) to the south.
President Michelle Bachelet said she planned to travel to the areas worst affected by the quake, the biggest to hit the world's top copper producer since 2010 and 2015's largest quake globally in terms of magnitude.
"Once again we're having to deal with another harsh blow from nature," Bachelet said in a televised statement.
Operations were suspended at two big copper mines, and copper prices on the London Metal Exchange rose to two-month highs in early Asian trading on worries about supply disruptions.
The quake was felt as far away as Buenos Aires in Argentina.
Tsunami advisories were issued for parts of South America, Hawaii, California and French Polynesia, although waves were generally expected to be small.
On remote Easter Island in the Pacific Ocean, islanders were evacuated to a church in the only town of Hanga Roa. By 0420 local time (0720 GMT), Chile's emergency office had cancelled the tsunami alert for the island and some parts of the coastal mainland, but kept an alert in place for a stretch of central Chile.
As far away as New Zealand, authorities warned of "unusually strong currents" and urged residents in eastern coastal areas to stay out of the water and off beaches.
Dozens of strong aftershocks continued to rattle central Chile, a largely agricultural region south of the mining belt.
"It's going to be a long night," said Ronny Perez in the inland city of Illapel, about 46 km (28 miles) from the epicenter.
A 26-year-old woman was killed by a collapsing wall in Illapel and another person died from a heart attack in Santiago, according to media reports.
Most buildings in Illapel had stayed standing, residents said. Quake-prone Chile has strict building regulations that limit potential damage.
The brunt of the damage was borne by coastal areas where houses and fishing-boats were smashed by waves. The coastal town of Coquimbo was hit by waves of up to 4.5 meters (15 feet) after the earthquake, Chile's navy said.
"We're going through a really grave situation with the tsunami. We have residential neighborhoods that have flooded. The ocean has reached the downtown area," said Coquimbo Mayor Cristian Galleguillos.
Residents reported looting of evacuated houses in Los Vilos, another seaside town, its mayor said.
Chile is due to celebrate its national holiday on Friday, but roads were cut off and public transport canceled between Santiago and the north, local media reported.
The quake is the latest natural disaster to roil mining in the resource-rich South American country, which accounts for a third of global copper output. Northern Chile was hit by severe floods earlier this year, while a volcanic eruption caused problems for residents in the south.
State copper miner Codelco said it had suspended mining operations at its Andina mine and had evacuated workers from its Ventanas smelter. Antofagasta said it had halted operations at its Los Pelambres copper mine and would wait until daybreak to assess damage.
Active Quake Zone
Chile, which runs along a highly seismic and volcanic zone where tectonic plates meet, is no stranger to earthquakes.
In 2014, an 8.2-magnitude quake struck near the northern city of Iquique, and four years earlier an 8.8-magnitude earthquake in central-southern Chile triggered a massive tsunami, and more than 500 people were killed.
In the hours following that quake, President Bachelet and other government officials misjudged the extent of damage and declined offers of international aid. That delayed the flow of assistance to disaster areas, leaving many survivors feeling they had been abandoned by the government.
Bachelet's government was also slow to prevent looting following the quake. Its failings hit her high approval ratings at the end of her presidential term, although she remained popular and was elected again in 2013.