One hundred and thirty firefighters are tackling blaze at the Mandarin Palace Chinese restaurant in Londonderry.
The fire, on Lower Clarendon Street, was reported just before 1pm. No casualties were discovered.
The Northern Ireland Ireland Fire and Rescue Service has declared a ‘major incident’.
Traffic diversions are in place as firefighters deal with the blaze in the Queen's Quay area.
Assistant Chief Fire Office Dale Ashford: "Major fire this evening in Derry. 15 pumps and around 130 firefighters are working hard to get the situation under control."
The PSNI said the operation was likely to continue until tomorrow.
Inspector Jon Burrows said: "Due to a fire at commercial premises in Queens Quay, Derry; Strand Road and Queen's Quay remain closed to motorists and pedestrians. It is envisaged they will remain closed until tomorrow.
"Evacuated residents will not be able to return to their homes this evening."
A fire service spokesman said outside NIFRS resources have been brought into the city to stand-by at both the Crescent Link and Northland Fire stations to provide normal coverage for other emergencies, as is the normal practice.
Thick heavy smoke is drifting across the city.
Residents and businesses in the Queen's Quay and Strand Road area are advised to keep windows closed due to the heavy smoke.