The clashes in Guayaquil's Litoral prison erupted after reports about shooting and explosions in the facility as well as the evacuation of staff. Police say automatic rifles and grenades were used during the clashes.
"According to the latest information, 116 people have died and about 80 more injured. All these people were inmates, no employees have been injured," Lasso said at a press conference on late Wednesday.
According to some reports, at least five prisoners have been beheaded as a result of violence.
The carnage was reportedly initiated by the gangs dubbed 'Los Lobos' (The Wolves) and 'Los Choneros' (originally from the city of Chone).
Lasso declared a 60-day state of emergency in the national penitentiary system after consultations with senior officials.
Conflicts between criminal groups and drug cartels in Ecuadorian prisons take place regularly, leaving multiple casualties.