Firefighters say a massive blaze that engulfed a vacant seven-storey building in central Sydney has now been "effectively contained".

The massive inferno saw plumes of smoke drift over the city and nearby streets shut down as the building started to collapse.

Hundreds of people were evacuated from the area as the fire burned through several levels of the multi-storey building on Randle Street near Central Station.

READ MORE: Witness accounts from the ground

Some sections of the exterior walls crumbled onto the pavement below.

NSW Fire and Rescue Commissioner Jeremy Fewtrell warned it would be still some time until the flames were fully extinguished.

"The fire is now effectively contained but it will be a substantial and very prolonged duration of firefighting to extinguish the fire completely," Fewtrell said.

"It's a combination of the aerial attack and the ground monitor attack at work at the moment."

Fewtrell said the building was made out of "well seasoned and dry timber" with significant airflow between the levels, which is what caused the building to burn with such speed and intensity.

"The information we have at this stage was the buildings were vacant or unoccupied, whether they were under construction or about to have sort of demolition or work done," he said.

Initial reports suggest the building was abandoned but hundreds of people in nearby apartments and office buildings have been evacuated.

Firefighters then worked to contain a new secondary blaze at a neighbouring building.

Fire alarms went off in surrounding buildings after sensing the smoke, which Fewtrell said contributed to everyone evacuating safely.

"We have some engineers attending the scene and they'll help guide our decisions around safety considerations, particularly around the risk of collapse," Fewtrell added.

"We will make the assessments on a building-by-building basis to determine when it's safe and the conditions that are safe for them to return."

Both NSW Police and Fire and Rescue have warned people to stay away from the scene.

https://twitter.com/FRNSW/status/1661634790662209536

'Bloody scary'

One woman who was near Central Station at the time told 9News she was "a bit in shock".

"I was right there and it was very loud," she said.

One student said he felt a wave of heat move across his face.

"It was bloody scary when it collapsed," he said.

"It was really loud and I was scared for the people who were around there.

"The wave of heat that came on my face, it was scary."

Police added that several road closures are in place around Central Station

Witnesses on the ground during the evening commute described the chaotic scene.

"Probably one of the biggest building fires I've seen in the city," 9News senior cameraman Mike McGee said.

"I first got off the train and saw the smoke.

"That was pretty much before any fire trucks or police had arrived.

"There were flames leaping out from every window."

Transport update

Light rail services on the L2 Randwick and L3 Kingsford lines have been suspended due to the blaze.

Train services have not been impacted by the blaze, a Transport for NSW spokesperson told 9news.com.au.

Some bus services are being diverted in the area.

Road closures

Chalmers Street and Randle Street are closed between Cleveland and Elizabeth Street.

Elizabeth Street is closed southbound at Foveaux Street.

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