Police said three people used explosives to access an ATM near Queen Victoria Market. (ABC News)

A man is in hospital under police guard after allegedly blowing up an ATM at Queen Victoria Market in Melbourne.

Victoria Police said three people used an explosive to gain access to the ATM in Victoria Street around 2:45am.

The trio fled on foot, but one man was found injured a short time later in Peel Street.

An Ambulance Victoria spokesperson said Advanced Life Support paramedics responded around 3am.

“A male in his 40s was treated for upper body injuries and transported to The Alfred in a serious condition,” the spokesperson said.

Victoria Police said the man was under police guard and would be interviewed.

Queen Victoria Market chief executive Matt Elliot said police arrived at the scene two minutes after the men were flagged as suspicious.

“They were identified on our security cameras immediately and identified as suspicious and our security then contacted Victoria Police,” he said.

“That was sufficient time for them to interfere with the ATM and unfortunately they’ve hurt themselves in the process.”

Mr Elliott said he was not sure what type of explosive was used on the ATM.

“I understand it wasn’t anything of scale … it was described to me like hitting it with a hammer, that kind of impact,” he said.

Police said the investigation into the incident was ongoing and urged anyone with information or footage to call CrimeStoppers on 1800 333 000.