Emergency services were called to the blaze in Pohutu St shortly after 9.30pm.
When they arrived a building was well alight with flames and smoke billowing metres above.
The Rotorua Daily Post arrived seconds after the first appliance and within minutes, an explosion boomed out of the flames and shook windows of nearby shops.
The first explosion was followed by at least another four before firefighters succeeded in dousing the flames. Each time an explosion happened, a wave of ash shot through the flames.
Whakatane residents from the opposite side of town arrived at the scene and said they heard the explosions from several kilometres away including James St and Riverside Dr.
One man, who lived within a kilometre of the fire and who did not want to be named, said the windows of his house hook with each explosion.
"I honestly thought something had hit the side of my house," he said.
Another man said he had been playing Playstation at a storage building only two or three doors down from the premises.
"We heard a sort of crackling then looked up at the ceiling and it looked like there was some sort of glitter on there," the man said. "Not long after that we saw the huge orange ball of fire and got out."
Police quickly cordoned the area including a nearby petrol station and asked the crowds that had gathered to stay back. A number of business owners with premises close to the fire showed up as news of the blaze spread.
Other commercial buildings in the area include a printing press, an automotive shop, a storage building and a cafe.
Radio NZ reported the Fire Service as saying the fire may be suspicious.
No one was in the building at the time of the fire, it was reported.
Firefighters took two hours to extinguish the fire and were planning to keep the cordons in place throughout the night.