According to power service company Con Edison, the outage hit the city at 8.30 p.m. on Saturday, reports Xinhua news agency.
The impacted area stretched from 40th Street in the south to 72nd Street in the north, and from Fifth Avenue to the Hudson River.
Many of the famous Times Square billboards went black as a result.
Local media reported that all restaurants have gone dark in Hell's Kitchen. There are also no working street lights in those affected sections of the city.
The city's subway system was also affected to a great extent as four stations were without power and closed to public.
Signals on the Sixth Avenue and Eighth Avenue were affected, thus disrupting services of D, F, M, A, C, E lines, the Metropolitan Transportation Authority (MTA) said on Twitter.
It added that there is only limited service on the numbered lines.
"Our entire system is affected by the Con Edison outage. In Manhattan, the bus is your best bet," MTA tweeted.
Several Broadway and off-Broadway shows said they have cancelled performances, including the well-known Dear Evan Hansen, Wicked, Waitress, and Mean Girls.
New York City Mayor Bill de Blasio tweeted that NYC Emergency Management is working with the police and fire departments and other city agencies to respond to power outages due to a manhole fire.
( With inputs from IANS )