The band playing at the club that night was known for its onstage pyrotechnic displays. The band reportedly purchased flares for outdoor use because the indoor ones are too expensive. The outdoor flares cost $1.25 each, compared with $35 apiece for the indoor flares.
A police inspector said members of the band knowingly purchased the cheaper items.
"The flare lit was for outdoor use only, and the people who lit them know that," said Inspector Marcelo Arigony, adding that members of the group have acknowledged regularly opting for the less expensive flares. "They chose to buy those because they were cheaper than those that can be used indoors."
The Rio Grande do Sul state forensics department raised the death toll Tuesday from 231 to 234 to account for three victims who did not appear on the original list of the dead. Authorities say more than 120 people remain hospitalized for smoke inhalation and burns, with dozens of them in critical condition.
The blaze began at around 2:30 am local time, during a performance by Gurizada Fandangueira, a country music band that had made the use of pyrotechnics a trademark of their shows.
Police have said the club's ceiling was covered with an insulating foam made from a combustible material that appeared to have ignited after it came in contact with a spark from a flare lit during the performance.
After the fire extinguisher malfunctioned, the blaze spread throughout the packed club at lightning speed, emitting a thick, toxic smoke. Because Kiss apparently had neither an alarm nor a sprinkler system and only one working exit, the crowd was left to search desperately for a way out.
About 50 of the victims were found in the club's two bathrooms, where the blinding smoke caused them to believe the doors were exits.
Police investigator Arigony said people headed to the bathrooms because the only lights in the dark club were coming from there, and the patrons mistook them for exits. The foam, which emitted a toxic gas, was not proper soundproofing equipment and was likely only used to cut down on the echo inside the club, Arigony said.
Outraged locals marched through Santa Maria Tuesday to demand justice for the dead, an unusual move in a country where public protests are rare. The demonstration interrupted the police news conference, even as Arigony pledged to investigate everyone involved in the tragedy - including the authorities charged with making sure such establishments are up to code, such as firefighters and city officials.
The fire inspired nationwide action, and several mayors said they would crack down on nightclubs and other venues in their cities.
The fire appeared to mark a possible turning point for a country that has long turned a blind eye to safety and infrastructure concerns. The disaster, the worst fire of its kind in more than a decade, has also raised questions of whether Brazilian authorities are up to the task of ensuring safety in such venues as the country prepares to host next year's World Cup and the 2016 Olympics.
The blaze was the deadliest in Brazil since at least 1961, when a fire that swept through a circus killed 503 people in Niteroi, Rio de Janeiro.
Sunday's fire also appeared to be the worst at a nightclub anywhere in the world since December 2000, when a welding accident reportedly set off a fire at a club in Luoyang, China, killing 309 people.
The Associated Press contributed to this report.