A video grab shows the explosion in Parchin, Tehran.
The tank blew up around midnight, with Fars news agency saying "a number of social media users reported seeing an orange light" in the east of the Iranian capital.
"A gas tank exploded in the Parchin public area. Thank God, there were no casualties," defence ministry spokesman Brigadier General Davoud Abdi said.
The blaze was brought under control by firefighters, and investigations were under way to determine the cause, he told state television.
Fars, which is close to ultra-conservatives in Iran, said that according to "videos sent by (our) readers, this light was seen for a few seconds".
It cited an "informed source" and said the site of the incident was not related to the military.
"At the entrance of the (nearby) Parchin military zone, there is no movement or traffic of fire and rescue vehicles," the news agency added.
AFP could not immediately verify purported videos of the explosion that went viral on Twitter.
Fars said that the flash of light was caused by "an industrial gas tank explosion" near a facility belonging to the defence ministry.
Mehr news agency said a "terrible sound" was heard.
"The cause of this sound and light is not yet known, but it was clearly heard in Pardis, in Boumhen and surrounding areas" of the Iranian capital, it said.
State television said various institutions were investigating the incident. Fars said police were involved in the investigation.
Initial investigations suggest gas was the cause of the blast, which destroyed the garage as well as two neighbouring buildings and prompted around 50 firefighters to rush to the scene.
A video circulating on social media showed thick black smoke billowing from a huge ball of fire.
Tehran fire department spokesman Jalal Maleki said a fuel tanker was unloading at the station at Pirouzi Street when it caught fire.
The incident took place at an intersection of Muara Rapak, Balikpapan, about 6.15 am.
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