An abandoned 24-storey building occupied by squatters in Sao Paulo has caught fire and collapsed, sending chunks of fiery debris crashing into neighbouring buildings and surrounding streets.

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Firefighters said at least one person had been killed in the collapse and there could be more, as they tried to locate three others who were still unaccounted for.

The building, a former headquarters of the federal police, caught fire around 1:30am local time on the sixth floor, according to firefighter Andre Elias.

Firefighters set up a perimeter and worked to evacuate people, with local media reporting that around 150 people lived in the lower 10 floors.

A few hours later, as flames engulfed the building's 24 floors, it collapsed.

Images on social media showed the floors falling on themselves like dominoes and debris flying in all directions.

Romulo de Souza, 49, who said he was part of a squatter occupation in the neighbouring building, claimed that when the fire began on the fourth floor, families began evacuating.

"Happily the majority got out," he said.

Mr De Souza said that residents believed the fire could have been started by a gas leak.

Three hours after the collapse, smouldering debris continued to emit smoke.

Clearing debris and accounting for people who had been in the building could likely take days.

Debris from the building piled up on the street below. ( AP: Sao Paulo Fire Department )

AP/Reuters