Huge fire that toppled Sydney CBD building contained

·2-min read
Dean Lewins/AAP PHOTOS

Firefighters who battled a huge blaze that destroyed a seven-storey building in central Sydney saved adjacent apartments by quickly hosing down flaring spot fires.

More than 120 firefighters from 30 fire trucks battled the blaze at a heritage-listed former hat factory in Surry Hills which broke out on Thursday afternoon, consuming the building as thousands of people watched on.

Fire and Rescue NSW Acting Commissioner Jeremy Fewtrell told reporters it was "incredibly lucky" that no one was badly hurt in the dangerous conditions of one of the CBD's biggest fires in years.

He praised the work of firefighters and said it was a "very significant fire" and it was concerning how quickly it developed.

On Thursday evening Mr Fewtell said the blaze had been "effectively contained", with crews expected to work through the night to ensure it was fully out.

Three ladder trucks were used along with tenders on the ground to hose down the intense blaze which sent a huge plume of dark smoke across the city.

The factory's roof collapsed, then the floors, before parts of the building's walls fell down shortly before 5pm, sending red hot bricks tumbling to the streets below.

A ute parked beside the building was also lost in the fire.

Mr Fewtrell praised the residents of nearby apartments and other buildings for evacuating promptly when multiple fire alarms went off. 

"There were some fires that spread into the apartment buildings ... firefighters were able to extinguish those and prevent them further penetrating into the buildings and causing significant damage."

Mr Fewtrell said it was believed the two buildings involved in the blaze were vacant.

"It was an incredibly intense fire and the age of the building, the type of construction with lots of timber frames and floors, and obviuosly with that, very well seasoned and dry timber.

Mr Fewtrell said there were no reports of injuries to members of the public but one firefighter suffered a minor burn to his arm.

He said firefighters still had a lot of work to do and that would continue into Friday as fire and police investigators try to determine the cause of the blaze. 

The fire closed nearby streets and forced the rerouting of buses and the shutdown of the nearby light rail service, affecting travel for thousands of commuters.

"Terrible fire in Surry Hills in my electorate," Sydney federal MP Tanya Plibersek wrote on Twitter.

"Please stay safe and listen to instructions from emergency services."

There were plans to turn the former hat factory in Randle Street into a 114-room "Hat Hotel", the Daily Telegraph reported.