There's been a large fire in a two-storey building in a commercial area of Dunedin.

It broke out just before 9pm on King Edward St in South Dunedin.

A reporter at the scene last night said dozens of people were out on the street watching flames and large amounts of smoke above the former Wolfenden and Russell building, situated between King Edward St and Rankeilor St.

Fenz Area Commander Phil Marsh said someone lived on the top floor and they had initially had concerns, but that person had since been accounted for.

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The lower floor of the building was commercial, but was unoccupied.

Six fire engines were in attendance and crews were attacking the fire from both King Edward St with an aerial snorkle and from the narrow Rankelior St.

"It's taken most of our firefighting resources trying to put it out", Marsh said at about 11pm Saturday.

"We've just really managed to start knocking it back now".

Marsh praised the efforts of firefighters in stopping the blaze from spreading to neighbouring buildings.

There were concerns earlier the roof of the building may collapse, threatening firefighters and surrounding buildings, though that threat appeared to have been contained.

The force of the water hoses sent sheet metal from the roof flying to the ground below, adding to the dangerous conditions.

Fire and Emergency shift manager Lyn Crosson says by 4.30am most fire trucks had been sent away.

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She says a few fire engines are still there dampening down hotspots.

Police and Fenz recieved multiple calls from members of the public that could see smoke above the building at about 8.50pm.

A fire investigator would be examining the scene today.