Two others were injured in the blaze which began around 03:00 (20:30 GMT Wednesday) at the Kandawgyi Palace.

The hotel, which was largely made out of teak and built in a traditional Burmese style, was a local landmark popular with tourists.

It took hundreds of firefighters several hours to put out the blaze. More than 140 guests were evacuated.

The blaze at the Yangon landmark lit up the city's skyline

It is unclear how the fire began, with varying media reports of either a gas cylinder explosion or an electrical wire short-circuiting.

Htay Lwin, a spokesman from the Htoo Group which owns the hotel, told AFP news agency: "It's hard to say why the fire broke out, the cause is under investigation."

He added that they were still trying to identify the person who died.

An American guest at the hotel, Adrienne Frilot, told Frontier Myanmar that she did not hear a fire alarm and woke up only when hotel staff knocked on her door frantically.

Hundreds of firefighters were deployed to put out the blaze

"We realised that something was wrong and opened the door and we smelled the smoke and then evacuated immediately," she told the local news website.

"There was no alarm and it just sort of sounded like there were drunken people in the hallways," she said, adding that staff helped to guide her and others to safety.

Guests have been moved to other hotels in Yangon.

The hotel can be seen in this file picture taken before the fire

Smoke was still rising from the hotel's ruins on Thursday

The hotel, which sits by the Kandawgyi lake, was built in the 1990s but its oldest section dates back to the 1930s, when the site was used as a rowing club by British army officers.

The Htoo Group was founded by controversial Burmese tycoon Tay Za, who was closely linked to Myanmar's former military regime.