Residents soon spread out to snatch up the notes, television footage showed.
Of the two people who were injured, one was a police officer.
At least 30 assailants and 10 cars were involved in the well-planned operation, Anselmo Cruz, head of the state police's robbery and kidnapping department, told a news conference, speaking alongside the governor and the mayor.
A bank robbery inspired by Netflix's popular drama series Money Heist woke its citizens rushing down to streets to collect the cash on the night of December 1 in the city of Criciuma, Brazil.
They also set fire to vehicles along a tunnel into the city from the main highway to stop police reinforcements from nearby towns.
José Damasio was driving home from work around 11.30pm (local time) when he passed street sweepers and other municipal employees painting crosswalks.
It was not immediately clear how many hostages had been taken or if they were all freed.
Images on Globo showed a bank vault with a square-shaped hole in it and a convoy of criminals' vehicles as they made their escape.
The exact amount of money stolen hasn't been clarified yet, however, four people have been arrested who were collecting cash thrown across the city due to the explosion, reports Al Jazeera.
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The criminals also attacked a police barracks.
A large gang of heavily armed bank robbers invaded the Brazilian city of Cameta just one day after a similar force struck another mid-sized city on the opposite side of the country, taking residents hostage as they looted a bank.
The robbery began just before midnight on Monday in the southern city of Criciuma and lasted almost two hours, according to a statement from military police in Santa Catarina state. It didn't respond to an Associated Press request for comment about local media reports the branch was a regional treasury.
The Cametá attack came a day after a similar heist to a Banco do Brasil branch in the southern city of Criciúma. Such incidents have occurred with some frequency over the past decade, he said.
"It doesn't happen without planning", Thyone said of the robberies.
Criciuma's Mayor Clesio Salvaro took to Twitter while the events were still unfolding to warn locals of the "robbery of great proportions, by very well-prepared thieves".
"Our city was always peaceful and I ask that everyone stay at home", he posted about 2:30 a.m. Wednesday. "Let the police do their job".
In Cameta, tactical forces as well as police from other areas were dispatched to reinforce the police.
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