The Boko Haram insurgents also abducted 11 more girls in Warabe and Wala communities in the Chibok Local Government Area of Borno State late on Monday.
The insurgents reportedly drove into Gamboru Ngala in armoured vehicles.
It was learnt that the insurgents, who seemed to have targeted a local market, shot sporadically at traders at the market before proceeding into the town to wreak more havoc.
Gamboru is situated along Nigeria-Cameroon border and is the administrative headquarters of the Ngala Local Government Area of Borno State. It is about 200 kilometres from Maiduguri, the state capital city.
Senator Ahmed Zannah, who is representing the area in the Senate, confirmed the killings. He said the invaders spent about 12 hours wreaking havoc on defenceless Nigerians.
He revealed that several other persons were injured in the attack, while almost all the houses and shops in the town were burnt down.
The senator, who spoke in a BBC Hausa report monitored in Maiduguri on Tuesday, said many people were wounded, while surviving victims rendered homeless as thousands of houses and shops were burnt by the rampaging gunmen.
He claimed that the attackers were armed with dangerous weapons comprising Armoured Personnel Carrier, Improvised Explosive Devices, petrol bombs, assault rifles and Rocket Propelled Launchers.
"The attackers stormed the communities in the night when residents were still sleeping, setting ablaze houses and shooting residents who tried to escape from the fire,'' he said.
He added, "About 300 persons were confirmed dead after the incident, with several others injured. Almost all the houses in the communities were destroyed by the hoodlums who threw IEDs at the buildings.
"My brother who was at the scene of the attack told me that the actual number of the dead cannot be ascertained but at least they are up to 300. In fact, as he spoke he wept following the high number of the dead bodies which littered the market."
According to him, the security forces earlier deployed in the area, had moved to the Lake Chad axis when they received intelligence report that some gunmen were sighted with abducted schoolgirls moving to the area.
"It was just an hour after their withdrawal that the terrorists invaded the town, shooting everyone at sight and setting buildings on fire. So far 200 vehicles and thousands of houses, shops and an outfit of the Nigerian Customs Service, (NCS) were all burnt", he explained.
A local government official who declined identification also confirmed the casualty figure.
"It is really a terrible situation, we had wanted to rush relief materials to the area to provide temporary succour to the victims. But we were prevailed upon by security agents to shelve our plans for security reasons," the official said.