"The tsunami didn't come by itself, it dragged cars, logs, houses, it hit everything on land", Nugroho said.
The tsunami was "about three meters high", Nugroho said.
Dramatic video footage captured from the top floor of a parking ramp as the tsunami rolled in showed waves bringing down several buildings and inundating a large mosque.
Communications "were totally crippled with no information" from Donggala, he added.
Strong aftershocks continued to rock the coastal city on Saturday morning following the massive 7.5 magnitude quake on Friday, which triggered the tsunami.
Nugroho described the damage as "extensive", with thousands of houses, hospitals, shopping malls and hotels collapsed, a bridge washed away and the main highway to Palu cut due to a landslide.
This morning, dozens of people were reportedly still trapped in the rubble of a hotel in Palu.
At least 540 people had been badly injured as hospitals struggled to cope with the influx of casualties.
Photos confirmed by authorities showed bodies lined up along the street on Saturday, some in bags and some with their faces covered with clothes.
An early tsunami warning had been issued by the Indonesian meteorological agency, but was later lifted after the agency ascertained that the water had receded. Officials said they were rushing to reopen the airport to allow aid to come in.
The quake and tsunami caused a major power outage that cut communications around Palu making it hard for authorities to coordinate rescue efforts.
"This is already a tragedy, but it could get much worse", it said.
"We're now getting limited communications about the destruction in Palu city, but we have heard nothing from Donggala and this is extremely worrying", he said.
The city's airport was also closed after its runway and a control tower were damaged in the quake.
President Joko Widodo is scheduled to visit evacuation centres in Palu on Sunday.
Over 400 people were killed when a powerful quake sent a tsunami barrelling into the Indonesian island of Sulawesi on Saturday.
In 2004, a tsunami triggered by an quake off the Indonesian island of Sumatra killed 226,000 people across the Indian Ocean, including more than 120,000 in Indonesia.
Strong aftershocks continued to rock the city on Saturday morning after waves up to 6 meters (18 feet) high swept through the scenic tourist town Friday, triggered by a 7.5 magnitude quake on land.
Disaster agency spokesman Sutopo Purwo Nugroho said in a television interview there are "many victims".
Just 34 minutes after Indonesia was hit by another major natural disaster, officials called off a tsunami warning.
"Coincidentally, there was an opening of the Palu Nomoni Festival on Talise Beach, so there were many people there", Rony said.
Anthonius Gunawan Agung, 21, refused to flee the Mutiara SIS Al-Jufrie Airport on Friday night as disaster struck.
Amateur footage shown by local TV stations, which could not immediately be authenticated by Reuters, showed waters crashing into houses along Palu's shoreline, scattering shipping containers and flooding into a mosque in the city.
"The death toll is believed to be still increasing since many bodies were still under the wreckage, while many have not been reached", he said.
He said: "There was no time to save ourselves".
More than half of the 560 inmates in Palu's prison escaped after its walls collapsed during Friday's quake, according to state news agency Antara.
Authorities have been having difficulties coordinating rescue efforts as the quake caused a power outage that cut communications around Palu and the nearby town of Donggala, the closest epicentre of the tremor.