Residents and holidaymakers in Mallacoota in Victoria's far east have described the sky turning from pitch black to blazing red as fire raced towards the seaside town.

Key points: An estimated 5,000 people sheltered at Mallacoota boat ramp as the fire hit the town

An estimated 5,000 people sheltered at Mallacoota boat ramp as the fire hit the town Residents said it was "pitch black" before the sky turned red

Residents said it was "pitch black" before the sky turned red The State Control Centre said large swathes of East Gippsland remain in the grips of a "broad scale" bushfire emergency

Thousands of people fled to the waterside this morning as fire raced towards the popular holiday destination.

Residents also reported hearing gas cylinders explode in the Mallacoota town centre.

Facebook user Jann Gilbert posted a series of photos of what she described as the "apocalypse", writing: "When will this nightmare end?"

"Unless you're here, you can't even imagine what it's actually like," she says in one of the videos.

"It's hard to breathe, even with a mask on."

This image became an emblem of Australia's fire crisis. ( Supplied )

"This is really scary now, it's just red, everywhere.

"The wind is intermittently howling, which brings more embers."

This family got into a boat to get away from the blaze. ( Supplied: Mishelle Quinn-Jackman )

Resident Mark Tregellas said about 5,000 people gathered at the Mallacoota boat ramp as the bushfire hit the town.

"It was pitch black until about five minutes ago, now the sky is red, it's starting to get embers coming out of the sky, the wind is coming directly at us from the west," he told ABC Gippsland this morning.

"Some people actually got into their boats and went across the other side of the lake to try and wait out the fire."

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 55 seconds 55 s Some Mallacoota residents took to the water as the bushfire reached the town. (Facebook: Cubin')

In a video uploaded to social media, a man wearing a cloth over his face and ski-goggles broadcasted from a boat, pointing at Mallacoota behind him.

"It's f***ing chaos," he said. "I've never seen anything like it."

The fire that reached Mallacoota started at Wingan River on Sunday. ( Supplied: Mike Lane )

Mr Tregellas told the ABC he had received an unconfirmed report that the fire had hit his home.

He had loaded up photos and personal documents into his camper trailer before moving to the boat ramp.

Witnesses described the sky turning from black to bright red. ( Twitter: @Brendanh_au )

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Francesca Winterson, who broadcasts from Mallacoota's local community radio station, said she doubted her home would be left standing as it was in the path of the blaze.

"My house won't survive. I've just accepted that," she said.

Sirens the signal to head to the water

The fire threatening Mallacoota started at Wingan River on Sunday and spread rapidly towards the coast.

Firefighters cut down trees in the area yesterday to mitigate risk and fire trucks surrounded people camping near the water, spraying down the area to keep it cool.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 23 seconds 23 s People sought refuge at the foreshore as the fire neared the town.

Mallacoota resident Don Ashby told ABC Gippsland that fire sirens went off shortly before 8:30am as the bushfire reached the edge of the town.

"The agreement was when all the trucks turn the sirens on that was when the fire hit and everybody had to go and get down to the waterline," he said.

He said he could not see anything as the sky turned black and ash fell as the roar of the bushfire came closer.

"It's like the darkest, darkest night," he said.

Sirens were the signal for people to assemble at the wharf. ( Instagram: @travelling_aus_family )

Earlier, resident Mariska Ascher told ABC Gippsland about 7:15am that she was staying in her home and the fire seemed "extremely close".

"It's really horrible, it's the worst it's been. It's really close," she said.

"Day has turned into night in Mallacoota", resident Brendan wrote on Twitter shortly after 7am. ( Twitter: @Brendanh_au )

"It's absolutely frightening. Black leaves are hitting our deck."

Resident Mick Dunne told the ABC many were preparing to lose their homes.

"We plan but there's no easy exit from the town. Those who left did so nervously, and those who stayed do so nervously," he said.

While the fire bypassed the town centre, homes on Mallacoota's fringe were burnt. ( Twitter: @brendanh_au )

Later, authorities said the fire had bypassed the town following a wind change, news that was met by cheers from the town's jetty.

But CFA chief officer Steve Warrington said houses had burnt down on the outskirts of town.