Fire crews have successfully extinguished the blaze at Te Kiteroa Retreat & Historic Homestead in Waimate.
A Waimate local said they noticed smoke coming from the homestead about 2pm on Saturday.
Firefighters were called to the scene at 1.45pm, after reports of smoke coming from the two-storey building.
A Waimate local said it is "devastating" and "terrible" to see the historic homestead on fire.
The person was up on a hill and saw "lots of smoke" coming from the homestead.
Much of the damage appears to be confined to the upstairs part of the building.
A spokesman says the fire was well developed upstairs, but there appears to be no structural damage at this stage.
No one was reportedly injured.
Waimate Mayor Craig Rowley said it was devastating to hear about the fire and said it was a loved property.
"It's an iconic building for the district ... it's been around for about 113 years now."
He said the community would also be saddened by the blaze, and his thoughts went out to the owners.
Te Kiteroa is a retreat that hosts workshops, talks, retreats and meditative experiences.
The homestead has seven bedrooms, two bathrooms and five ensuites and was built in 1913.
Te Kiteroa was due to host a Heritage Festival from May 25-30.
A fire investigator will be at the scene tomorrow morning to try to determine the cause.