Getachew Asres, regional Dire Dawa police commissioner, said: "The death toll from the flood caused by the overflow in Dire Dawa reached 191 by 8.30pm (1730 GMT)."
"Thirty-nine of the deceased were children under the age of seven," he added, speaking to AFP by phone from the ravaged township, about 500km east of the capital Addis Ababa.
The police and army launched a rescue operation early on Sunday, using bulldozers to dig through the sandy river banks in search of more corpses.
Some 220 homes had been destroyed by the flood, a police official said, and 90 people have been released from hospital after treatment, although four remain in hospital with serious injuries.
Aid workers and residents, who scoured for the survivors and bodies, said several thousands of civilians were displaced and others reported missing.
"We have between 2,000 and 3,000 people displaced. With the ICRC (International Committee for Red Cross) and other government organisations, we are trying to facilitate shelters and other support as the search for more bodies and survivors goes on," Kasahun Debelie, a local Red Cross official, said.
Women and children
Residents said the casualties of the floods, which are as a result of the June-to-September rainy season, were mainly women and children, many of whom were swept away while asleep in poorly constructed shacks along the river bank in the poverty ravaged region.
"Most of the people in the village known as the 'Coca Cola' area were in bed when the flood hit the area. The search for more bodies is going on with the help of the army and local people," a witness said.
The floods also cut off area highways, leaving travellers stranded, local radio stations reported, citing witnesses and residents.
Electricity and telephone outages in the town have made it difficult to get information.
Last year, at least 200 people were killed and more than 260,000 displaced when heavy rains pounded the same region, which lies close to Ethiopia's Somali state.