According to sources, insurgents stormed the town at 5:30 p.m. on Saturday and began shooting indiscriminately.
The attack is said to have killed many individuals, including the terrorists, and injured others.
During the attack, the bandits also set fire to many properties.
The attack was verified by Damboa District Head Zanna Lawan Maina.
He said: “Yes some armed Boko Haram terrorists invaded Damboa this evening, I am not in the town as I am away for an official engagement.
“Unfortunately, we couldn’t get access to the only existing telecommunication service provided by Airtel to ascertain the condition at the time of the incident.”
The state capital, Maiduguri, is roughly 85 kilometres from Damboa, the seat of the Damboa local government area.
Since 2012, the town has been the target of multiple Boko Haram attacks.