Oyo state government has imposed 24-hour curfew on Shasha market.
The market has also been ordered shut down indefinitely.
The decision, according to Governor Seyi Makinde, follows the continued killings and destruction of property in the market.
The Chief Press Secretary to Governor Makinde, Taiwo Adisa confirmed the development on Saturday.
The clashes rocking the market continued Saturday morning with youths unleashing mayhem on one another in the area.
Residents said they had fled the entire area and could not pass the night in their homes on Friday night for fear of overnight attack from any of the warring groups.
Sources said despite the deployment of police and security agencies in the area, yet to be identified groups razed the Shasha market overnight by burning down some shops, kiosk and wares of some traders.
The source said security operatives deployed to the area could not do much as they were only stationed by the main road while clashes and burning of the market was ongoing in the interior.
Another source said people in the area woke up to another round of clashes as both youths from the Yoruba and Hausa extractions vowed to square it out.
The Yoruba youths, who were said to be hellbent on avenging the death of a cobbler after being reportedly hit with charm by a Hausa cart pusher.
The source accused the security operatives on the ground of only standing guard to protect the Seriki Shasha while the house of the Baale Shaha was left unattended to.
Another unconfirmed source said the angry youths from extractions in their hundreds are already engaging in free- for- all.
Amid the fear of an ethic uprising, many residents of Shasha community on Friday relocated from their homes to neighbouring communities to avert being caught in the web of a reprisal attack by conflicting groups.
The peace in the community was stalled in the wake of the crisis that ensued between some hoodlums and the Hausa traders following the death of one cobbler in the market.
The clash between the two groups in the market reportedly degenerated towards the evening on Friday.
Unconfirmed reports stated three persons were killed in the clash while shops and other properties were said to have been burnt in the area by hoodlums who reportedly seized the clash to wreak havoc on innocent people.
But the Oyo State Police Command said only one person died, adding that the crisis started as a clash between two miscreants.
The police had also added that it is collaborating with sister agencies who have been massively deployed to the scene to restore peace.
Although the police on Friday said normalcy was gradually returning to the area and that critical stakeholders have also been consulted to appeal to the people, the situation Saturday morning proved otherwise.
As at the time of filing this report, unconfirmed sources said the clashes had extended to the interior of the Shasa.
A source who visited the market early Saturday morning confirmed ongoing burning of some shops, stalls and items with the entire market entirely deserted.
In announcing the curfew Adisa said the decision follows skirmishes reported in the market.
He said the Governor gave the order to forestall breakdown of law and order in the area and equally imposed a curfew on Shasha and the market area. The curfew is to run from 6 p.m. to 7 a.m.
He warned residents of the affected area to go about their legitimate businesses peacefully, stating that anyone caught perpetrating violence will face the wrath of the law.
He said: “Governor Seyi Makinde has directed the immediate closure of Shasha market indefinitely following reports of a breach of peace in the area.
“The governor has also approved the imposition of a curfew on Shasha. It will run from 6 p.m. to 7 a.m.
“Residents of the affected area are enjoined to go about their legitimate businesses within the hours stipulated by the law.
“Anyone caught disrupting the peace of the community will be made to face the wrath of the law.”