At least 147 people are reported killed and dozens injured after suspected Al Shabaab gunmen attacked Garissa University College in northeast Kenya Thursday.

Interior minister Joseph Nkaissery says over 518 students have been rescued and 79 others were injured by the attackers with nine in critical conditional and have been rushed to hospital in Nairobi.

Police say the five-or-so masked gunmen attacked the institution, a constituent college of the Moi University, at around 5.30am Thursday.

This is the deadliest attack since US embassy bombings in 1998 and surpasses the Westgate mall massacre in 2013, where at least 67 people were killed.

"We are mopping up the area," Mr Nkaissery told reporters, saying that four gunmen had been killed after Kenyan troops launched an assault on the final building where the insurgents had holed out for over 12 hours.

"90 per cent of the threat has been eliminated, of course at a very heavy cost in terms of human loss of life," he said.

Kenya Defence Forces (KDF) and police entered the university’s compound in the morning and engaged the attackers in a gunfight for several hours.

Terrified students rescued from the college were gathered at a KDF camp near the Garissa airstrip.

Inspector General of Police Joseph Boinnet, who travelled to Garissa with Mr Nkaissery, told journalists a dusk-to-dawn curfew will be imposed on four counties -Garissa, Wajir, Mandera and Tana River - from Friday starting at 6:30pm to 6:30am local time until April 16.

Police said the gunmen were cornered in one hostel, which housed 360 students, on the campus and were preventing security forces from approaching by firing from a sniper’s position on the roof of one of the buildings.

The Kenya Government named Mohamed Kuno, a former madrassa teacher from Garissa who also goes by the names Mohamed Mohamud, Dulyadin and Gamadheere, as the mastermind of the attack and offered a Ksh20 million (about $220,000) bounty for information leading to his capture or killing. This is up from the initial Ksh2 million (about $22,000) bounty offered last year for either Kuno or Sheikh Ahmad Iman Ali, the leader of Al Shabaab’s Kenya cell.

Al Shabaab has claimed responsibility for the attack, saying it deliberately targeted non-Muslims in a raid that “began at 3am”. An official of the terror group interviewed by BBC said the death toll was certain to rise.

Reporting by Aggrey Mutambo, Abdimalik Hajir and Agencies