"We are expecting that thousands of dead bodies may be found within a few days, said Shekhar Chandra Das, the deputy head of the government's disaster management office.
About 1,000 fishermen and 150 boats remain unaccounted for in the Bay of Bengal, Red Crescent officials said.
Military ships and helicopters are trying to reach thousands of people believed to be stranded on islands in the Bay of Bengal and in coastal areas that have been cut off.
Navy ships have scoured coastal areas and sought to clear river channels clogged with sunken vessels.
Most of the deaths came as homes were washed away or blown down
as cyclone Sidr struck the country's southern coastline late on Thursday night with 250kph winds that whipped up a tidal surge.
Many others drowned or were lost at sea.
In one village, residents told the AFP news agency that more than 100 people died when the area was engulfed by the tidal surge.
"A six-metre wall of water wrecked the village of Charkhali and 30 more people are still missing," said KM Abdul Wadud, a local government official.
Owen Fay, Al Jazeera's correspondent in Bangladesh, said that he had seen worsening conditions as he travelled from the capital Dhaka to the coastal town of Barisal.
"As we get further and further away from the capital Dhaka and closer the coastal regions ... the devastation gets worse," he said.
Fay said: "We have seen homes and livelihoods completely destroyed.
"The government is seeing the scale of the storm for the first time and although they say they have a plan in place, they did not realise how badly some of these places have been hit."
Residents in southern districts near the coast told of their terror as they bore the full brunt of the storm.
Fulmala Begum, 40, said she was not warned to evacuate and had to take refuge under a bed with her husband and two children as the storm roared around her.
"Five hours later we found ourselves under a heap of tin roofs and two huge trees. Not a single house in my village was spared the catastrophe," she said.
'Great human tragedy'
A district official said Bangladesh suffered another "great human tragedy".
He said that in Jhalokati district, 140km south of the capital Dhaka, every one of its 554 villages had been hit.
|The UN and the European Commission have|
pledged emergency aid to Bangladesh [AFP]
Experts describe Sidr as similar in strength to the 1991 storm that triggered a tidal wave, killing an estimated at least 140,000 people.
Another cyclone in 1970 killed up to half a million people.
But officials are hoping the death toll - while high - will not reach the scale of previous disasters because of a network of cyclone shelters and an early-warning and evacuation system.
The UN has pledged several millions of dollars in aid while the European Commission said it is sending $2.2m in emergency relief to Bangladesh.