At least 244 people were trampled to death and about the same number were injured on Haj day, Sunday, as the Hajis scrambled to throw pebbles at the devil (Jumrat), Haj Minister Iyad Madani said.
The minister told a press conference that the stampede started at about 9:00 am (0600 GMT) and lasted for 27 minutes.
Madani said that eight of those hurt were in critical condition.
The 'Stoning of the Devil' ritual was interrupted for two-and-a-half hours before resuming at noon, he said.
Stampedes are always a threat during the Haj pilgrimage, which this year saw over two million flock to holy sites in Saudi Arabia.
"We believe that most of the dead are from among illegal pilgrims," Madani said, referring to those who had come earlier in the year to perform Umrah and stayed illegally and local residents who never register for the Haj.
A Saudi pilgrim at the site of the stoning said he saw at least 30 people lying on the ground but he was not sure if they were all dead.
Ali al-Awja, another Saudi pilgrim, said he saw "three or four people dead".
Police, who were deployed in large numbers, tried to keep the ceremony orderly with frequent warnings through loudspeakers, while a helicopter hovered over the scene.
"In the area of Mina, 10,000 policemen were deployed before the Haj," said Madani, adding that 2,000 national guard members were deployed, over the area following the stampede, as reinforcements.
Madani said he could not yet provide nationalities of those who perished.
However, he did say that over 2.3 million people had travelled to the country for Umrah, of which 12 percent illegally stayed on to perform this year's Haj.
Almost all of those who stayed on were from Egypt, Pakistan, Yemen, Sudan, Nigeria, Ethiopia and Indonesia, he added.
India's consul general in Mina, Sayeed Akbaruddin, told the NDTV news channel, that two Indians were among the dead.
During the stoning ritual, Hajis clamour around a circular fence and a bridge to fulfil the last important rite of Haj.
'Stoning the devil' marks the last stage of Haj.
To cries of 'Allah-o-Akbar', or God is Greatest, the faithful throw seven small stones at each of the three 18-metre high pillars standing 155 metres apart.
The first two days of the pilgrimage passed without incident under tight security.
However, Madani also said that 272 other pilgrims had died since the start of the pilgrimage due either to fatigue or illness, classifying their deaths as 'normal'.
The worst toll of the pilgrimage was in July 1990, when 1,426 pilgrims were trampled or asphyxiated to death in a stampede in a tunnel, also in Mina.