Hundreds of others were injured in the fire, which broke out in the city of Santa Maria. Firefighters are still looking for more victims.
Police say the blaze set off a panicky stampede in the club, which was hosting a university party. Witnesses say that a flare or firework lit by band members may have started the fire.
"The band that was onstage began to use flares and, suddenly, they stopped the show and pointed them upward. At that point the ceiling caught fire. It was really weak but in a matter of seconds it spread," said survivor Michele Pereira.
Another survivor told Globo TV network that after the fire erupted, security guards were blocking the exit door because they wanted everyone to pay their bills.
Officials are using a local sports center as an improvised morgue.
A security guard at the Kiss club said the venue was at its maximum capacity of between 1,000 and 2,000. An earlier count put the death toll at 245. Fire officials told Globo TV that most of the victims died from smoke inhalation, but several burned to death.
Santa Maria, which is at the southern tip of Brazil near the borders with Argentina and Uruguay, is a major university city with a population of around a quarter of a million.
The Associated Press contributed to this report.