One of them, a man in his 30s, suffered serious burns to his face, and 41 others - customers and employees of both establishments - were also injured.
The cause of the blast was still under investigation, police said, but there were reports that it may have been a gas leak.
Witnesses also reported smelling gas in the area following the explosion.
Firefighters operate at the site where a large explosion occurred at a restaurant in Sapporo, Hokkaido, northern Japan, in this photo taken by Kyodo December 16, 2018.
Chaos sparked in the Toyohira district as one of its popular restaurants was hit by a huge blast and devoured by flames.
Kyodo news agency reported that fire inspectors two months ago found that most of the building's tenants lacked evacuation gear as well as devices to warn of electrical short circuits.
The Fire and Disaster Management Agency said it has dispatched seven officials to the site to look into the cause.
Japan explosion: dozens injured as blast destroys Sapporo restaurant
According to Japanese news agency NHK, the restaurant, a two-storey building, was destroyed in the explosion.
"The ceiling fell, then the entire upper floor collapsed and we were all stuck".
Several people were rushed to hospital by ambulance following the blast.
The Sapporo fire department sent out more than 20 fire engines in response to the explosion and believes that the number of reported injuries could rise, Sho Saikoku, of the Sapporo fire department confirmed to CNN.
The explosion occurred in Sapporo, the capital city the northern main island of Hokkaido, and caused nearby apartment buildings and houses to shake.
A nearby worker told the same outlet that the power of the explosion shattered the windows of the building he was working in.
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