ADDIS ABABA - Floods killed about 150 people in eastern Ethiopia when heavy rains caused a river to burst its banks, sending a wall of water into a town that killed most of the victims as they slept, police said on Sunday.

"Floods from the overflowing Dechatu river hit Dire Dawa town in the middle of Saturday night while residents were sleeping," police inspector Benyam Fikru told Reuters.

"The death toll has now reached 150."

Rescuers from the police and army launched an operation early on Sunday, Benyam said, using bulldozers to dig through the sandy river banks in search of more corpses.

"We may call off the search as evening approaches and then resume the operation in the morning," he added.

Some 220 homes had been destroyed by the floods, Benyam said, and 90 people have been released from hospital after treatment, although four remained there with serious injuries.

Benyam said a store of coffee destined for export was also swept away when the floods hit the town, located in Ethiopia's lowlands, 525 km (326 miles) east of the capital Addis Ababa.

"The destruction caused to property could run into millions of dollars," the police inspector said. "The estimate is being worked out and will be released as soon as possible."

Heavy rains in Ethiopia's highlands during the June-August season usually cause rivers in lowland areas to overflow.

Last week, government officials said some 15,000 farmers had been rescued from flooded villages and taken to safe areas.