One man has died and another is in a critical condition after a gas explosion north of Melbourne.

The men were working in a cellar at a disused hotel in Rochester at the time of the blast about 1.30pm on Sunday, Rural Ambulance Victoria spokesman John Mullen said.

Both suffered burns to between 40 and 50 per cent of their bodies, including their airways, and were treated and stabilised at the scene.

They were then flown to the Alfred Hospital burns unit in a critical condition but one of the men, aged 34, died later on Sunday.

The other, 52, remains in a critical but stable condition, a hospital spokeswoman said.

Police say they are investigating the circumstances of the incident with WorkSafe and will prepare a report for the Coroner.