A fire at Victoria's oldest Greek Orthodox church in East Melbourne, which forced the evacuation of about 200 people from nearby buildings, has caused an estimated $500,000 damage.

Crews were called to the building on the corner of Victoria Parade and Lansdowne Street just after 1:30pm.

Smoke is seen billowing from a church in East Melbourne. ( Supplied )

The Metropolitan Fire Brigade (MFB) said the fire was reported by a passerby, and crews — located a block away — were at the scene within minutes.

Authorities said the fire was under control within an hour and was mostly contained in the church's roof.

"There was no-one inside the building, the building was empty, but crews found the fire was impeaching on the premises behind and at the side of the church, so they made sure that those exposures were covered as well," the MFB's Martin Braid said.

He said investigators were looking into the cause of the blaze.

Parish priest Father Kosmas Damianides said he was shocked.

"There were some icons that were burnt, unfortunately, and this is a 130-year-old church and the icons are almost as old as the church," Father Damianides said.

"It's been part of [parishioners'] lives for so many years, many people have got married here, many people have got christened here, that's devastating to hear the church has caught on fire."

Firefighters douse the scene after the fire had been extinguished. ( Audience submitted: Patrick Herve )

Smoke very thick, acrid: witness

Paul Brennan, who works next door, described seeking smoke pouring from the church.

"There's just smoke billowing through the roof, very thick, quite acrid, smells of rubber," he said.

"We've got I don't know how many fire appliances, police, ambulance now in attendance.

"Hoses are being connected, they've got the water going in there."

Earlier, all westbound lanes on Victoria Parade were closed.

Members of the Greek community celebrated Greek Easter on the weekend.

Ted Ibrahim said he drove past the blaze before firefighters arrived.

"It was horrifying ... devastating really," he said.

"We saw a whole lot of flames come up over the top window and a whole heap of black smoke."

Father Kosmas Damianides said it was devastating to hear about the fire. ( 774 ABC Melbourne: Clare Rawlinson )