After an hour of fighting the flames, firefighters were able to effectively contain the fire.
WooliesX worker Sam Jarvis witnessed the blaze from across the road.
The building is former Hendreson Hat factory and was part of plans lodged with Sydney City Council in 2016 to develop a group of buildings on Randle Street into a boutique hotel.
The plans by developer Hanave included converting four adjoining buildings on Randle Street into hotel or motel accommodation, in a manner that ensures the heritage of the hat factory was retained and conserved. The cost of project was reportedly about $40 million.
Firefighters, police and emergency services respond to a large building fire on Randle St, Surry Hills. Dion Georgopoulos
Mr Pisanos said no public injuries and casualties occurred as a result of the fire. One firefighter experienced minor burns while putting out the fire and received paramedic treatment.
“The information we have at this stage was the buildings were vacant or unoccupied,” he told reporters.
Mr Pisanos said firefighters and police plan to stay in the area into the Friday morning to handle the structural collapse and put out remaining fires.
He said that while the fire was contained, it did temporarily spread to other apartment buildings, but firefighters were able to quickly put those flames out.
Neighbouring streets and laneways have been closed as a dark plume of smoke hangs across the central city.
The building engulfed in flames. Nine News
Locals were urged to stay away from the area and listen to advice from police and firefighters.
Buses have been re-routed to avoid the area, and the nearby light rail has been shut down but trains continued to operate at Central Station nearby.
“Terrible fire in Surry Hills in my electorate,” Sydney federal MP Tanya Plibersek wrote on Twitter.
“Please stay safe and listen to instructions from emergency services.”
– with AAP