The thick black smoke pouring from the Sky City Convention Centre's roof is believed to be toxic.
Auckland Regional Public Health Services issued an alert for people who live and work in Auckland CBD to stay away from the smoke and close windows.
People should shut down external ventilation if smoke is being drawn into their building and wipe down food preparation and cooking surfaces if affected by smoke.
Anyone who has shortness of breath or worsening asthma should go to a doctor.
"People who smoke, the elderly, children, and those with heart disease, asthma or other lung conditions are at greatest risk of harm from smoke inhalation and should avoid exposure," ARPHS said.
Anyone with health concerns should call Healthline at 0800 611 116 or seek medical assistance.
The air smells strongly of burning plastic and chemicals and pedestrians are covering their faces as emergency workers shout at them to evacuate the streets surrounding the building to get away from the "dangerous" fumes.
Health authorities are warning people to stay away from the smoke and keep their windows closed, with children, the elderly and people with health conditions most at risk.
Assistant area commander Dave Woon said gas cylinders, bitumen and insulation were burning on multiple floors of the building and the fire was not under control.
All Auckland's fire service resources are being thrown at the blaze, including two aerial units. The dozens of firefighters battling the blaze are wearing masks and gas canisters, Woon said.
Bystanders are being shouted at to keep away from the area, even those standing several blocks away from the fire. Police on Victoria St and Wellesley St are wearing masks as they direct traffic and people away from the smoke.
One person has been taken to hospital in a serious condition due to the fire, but it's not known whether they were injured or affected by the smoke.
At 4pm fire staff were not speaking to reporters and were unable to confirm how dangerous the smoke was. But many pedestrians were wearing masks and others were covering their faces with their clothes.
What initially smelled like a campfire has become a strong smell of burning plastic and chemicals.
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Crews on Hobson St are attempting to tackle the blaze with hoses from atop an extended ladder. The occasional piece of debris flutters out of the smoke, along with water carried in the wind sprinkling on people below.
A man who works in building about two blocks away said the smell of the smoke was coming in through the air conditioning.
"It felt like I was working next to a wood fire," said the man who didn't want to be identified.
"It was irritating, the acidity of it. My eyes were watering."
The smell became so bad that workers were sent home early.
Auckland Regional Public Health Service is warning people to stay away from the smoke, with smokers, the elderly, children and people with heart disease, asthma or other lung conditions at the most risk.
People should keep windows closed and shut down any external vents if smoke was being drawn into the building, ARPHS said. If areas were affected by smoke people should wipe down surfaces used for cooking and food preparation before using.
Anyone with shortness of breath or worsening of asthma symptoms should see their doctor, the health service tweeted.
Earlier, hundreds of workers from the construction site stood on Hobson St watching the black smoke billowing overhead. But people's throats began constricting and many started pulling their shirts up over their mouths as the wind blew smoke down into the street.
The workers were herded up Hobson St and cordons put up to stop people walking through. But the occasional pedestrian slipped through in the haze. An elderly couple were seen wandering out of the smoky street, followed by an old man.
At times the smoke was so thick it was impossible to see the fire trucks and flashing lights on Hobson St, even from 100m down the road.
The black smoke was blowing east down Wellesley St, filling the city's streets and settling in the dip in front of Albert Park.
As the haze fills the city air conditioning units are being turned off to stop them dragging fumes and smoke into nearby commercial towers.
Dean Humphries, hotels national director at Colliers International, said the intensity of the fire would determine the amount of damage to the convention centre but even in his building on the Queen St/Wyndham St corner, commercial chillers had now been turned off.
Humphries works from the high-rise SAP Tower owned by Robt. Jones Holdings, an A-grade office tower regarded as a premier address with blue-chip tenants.
"That's to stop the air and smoke coming into our office building via the plant on the roof," he said.
"It's a sad day for us because we were all so forward-looking to the Convention Centre opening and all the business coming to the city," Humphries said, raising questions about damage to SkyCity's neighbouring Horizon Hotel, now being fitted out, ready for an opening ahead of October next year.
"Smoke that thick and black billowing out for two hours – the convention centre was to be such a big demand driver and to bring so much business here," he said.