Firefighters will be battling to contain a blaze in vacant buildings in Sydney’s CBD well into the night.

NSW Fire and Rescue told media at the scene at Surry Hills that while the fire was “effectively contained”, there would be “a very prolonged duration of firefighting to extinguish the fire completely”.

“I expect they will be here all night and into the morning,” the spokesperson said.

The intersection of Chalmers and Elizabeth Street in Surry Hills has been cordoned off and crowds gathered to watch, as smoke billowed across Sydney’s inner city. Blue and red emergency lights flash amid the whirr of pumping water.

The fire which engulfed a large building in Sydney’s CBD has now been contained, according to NSW RFS Acting Commissioner Jeremy Fewtrell. “But it will be a substantial and very prolonged duration of firefighting to extinguish the fire completely,” Mr Fewtrell said. “So I expect that we will be here all night and into the morning.”

The property was vacant or about to have some demolition or construction done, NSW Fire confirmed.

A firefighter blasts the building on Randle St with a ladder while dirty white hoses snake along the road between trucks.

The nearby Royal Exhibition Hotel is full of punters, some watching the firefighters’ efforts through the window.

More than 100 firefighters have extinguished the bulk of the fire and stopped the spread to surrounding buildings.

Michelle Slater is visiting Sydney from Canberra on holiday and had just exited Central Station when she noticed the smell of fire.

Twenty fire trucks and multiple aerial ladder trucks are being used to extinguish the fire.

The walls to the back and front of the building have collapsed.

Neighbours speak out

The burning building belongs to property development company Hanave, which owns five buildings in the neighbourhood, including grungy artist‘s studio Hibernian House directly across the road.

The Australian understands some artists also live in Hibernian House, despite it being listed as a commercial building. Others just use the space for work.

One resident, who wished to remain nameless, told The Australian she often sees children and homeless people break into the building that burned down.

“The building was technically abandoned,” she said.

Hanave owns five properties across Surry Hills, plus properties in Chippendale, Bondi, Neutral Bay, Ryde, Rose Bay and the Sydney CBD.

The offices on the other side of the burning building are occupied by alternative medicines practice Wholistic Medical Centre.

One worker told The Australian their office was evacuated when the fire broke out.

A few doors down, the WooliesX building was also evacuated.

Walls crash to the ground

The fire broke out at around 4pm on Thursday.

Explosions were heard coming from the fire and the heat could be felt from more than a block away as large crowds gathered in the streets surrounding the area.

Video footage above the scene have shown the building completely gutted by the fire as parts of its exterior walls continue to crash to the ground below.

At least 50 people have been evacuated from buildings in the area as the fire burns through the whole interior of the building.

Parts of the wall of the building collapsed sending plumes of black smoke into the air.

The flames could be seen from Anzac Parade and from Redfern Station.

Commuters leaving the city on Thursday evening faced long delays as nearby roads were closed and train lines suspended.

Flames were shooting out of the building as firefighters blocked off Elizabeth St, while shocked commuters lined the street.

“A tornado of black smoke has blanketed the area,” one witness said.

“The building looks like the bottom of a fire pit.”

Witnesses have described near constant crashing noises and ambers raining down.

Elizabeth Street has been blocked off by authorities as they struggle to battle the blaze.

More than 100 firefighters, 20 fire trucks and a cherry picker were working to contain the blaze.

A lone firefighter in the crane-like cherry picker can be seen pumping water at the flames.

“The building is starting to collapse, while the inferno is beginning to spread to several neighbouring buildings, including residential apartments,” a Fire and Rescue NSW spokesperson said.

“At least one vehicle in the vicinity has also been destroyed by fire.”

It’s believed that the building was vacant however it is known as a place where homeless people camp.

The fire has spread to a silver ute parked on the street outside that was seen fully engulfed in flames.

The fire has spread to another building with dozens of people evacuated from a white modern apartment complex as embers fall onto their apartment balconies.

Residents of the many apartment buildings throughout the area have been barred from entering their homes as firefighters contain the flames.

Police have pushed onlookers back to Elizabeth Street where massive crowds of people have gathered to watch the flames.

Witnesses have seen the walls of the building collapse into the fire causing a fireball to leap metres into the air.

Sydney‘s Lord Mayor Clover Moore said she was also watching and waiting for updates.

‘Like you, I’m watching the aggressive fire take hold of a building in Surry Hills this afternoon. The building appears to have been completely engulfed with flames. Please stay safe and listen to warnings,’ she said.

With Eli Green and Nathan Schmidt/NCA Newswire