Australian prisoner Shaun Davidson is among four inmates who have dug under the walls of the notorious Kerobokan Prison and escaped.
A guard tower hovers above it, but was unmanned at the time due to staff shortages.
Two buckets, some towels and sandals were found near the tunnel entrance.
"We have spread the photos of those foreign inmates that have escaped and we are chasing them now", he said.
Davidson had just two months and 15 days left to serve of his sentence for immigration offences after he was caught in April a year ago for using another man's passport on the popular tourist island.
"Up to tonight, there is no information that the four have been caught", head of Badung District Police in Bali Yudith Hananta told AAP at around 9pm local time.
"It turned out it was a tunnel leading to the street", he said.
"We hope they haven't left Bali, so it is easier for us to catch them". Their clothes should be dirty, right?
The four men were serving jail terms for a mix of drug and fraud offences.
Iliev, 43, was serving seven-year sentence for money laundering, while King, 50, had been serving seven and a half for drug offences as well.
It is believed the four men jumped from the roof of the prison's B Block shortly after 630am and ran to the prison clinic, where the hole connected to a waste water tunnel. He also believed that the men were still in Bali. He was arrested in April 2016 after he signed into a guest house in Kuta under the name Michael John Bayman from a passport.
Despite overcrowding in Kerobokan, he said it wasn't the "living hell" he thought it would be.
Last week, dozens of inmates escaped from an overcrowded prison in western Indonesia after floods caused a wall to collapse.