The Republika newspaper reported that torrential rains on Thursday dislodged solidified lava from the slopes of the nearby Mount Kelud volcano and washed it into a nearby river.
At least nine people who had been collecting stones and sand were killed by the flows.
At least one person is still missing, the newspaper said.
Kediri is about 120 km (75 miles) southwest of Indonesia's second largest city Surabaya.
The 1,731 metre Mount Kelud's biggest eruption was in 1919, killing thousands of people. Its most recent eruption in 1990 claimed 15 lives.
- Reuters - Thomson Reuters Foundation
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