A colleague had reported hearing a bang then seeing oil dripping from the crane, she said.
The crane operator had made it safely down from the crane and was being medically assessed, Fire and Rescue NSW acting superintendent Josh Turner told AAP.
He said there was some shaking of the crane tower when the boom collapsed, forcing emergency crews to withdraw to a safe distance.
The fire was contained within the cabin and fire crews were attempting to position ladder platforms nearby to better tackle the blaze, Supt Turner said.
"The priority is maintaining the stability of the crane," he said.
A Lend Lease spokesman said a team had been sent to assist emergency workers and try to determine how the fire started.
"It's unusual, very unusual," he told AAP.
- AAP