Video footage has shown exploding gas cylinders flying through the air during a massive fire in Northampton, in Western Australia's Mid West.

The blaze, which started at hardware store CT & L Woodcock on Hampton Road on Sunday afternoon, caused "total destruction", residents said.

The fire is estimated to have caused millions of dollars worth of damage to businesses in the town.

An emergency was declared as the fire quickly gathered momentum on Sunday, burning through fuel, paint, and oil and causing the gas cylinders to explode.

Shire of Northampton CEO Garry Keeffe said he watched a gas bottle fly from the site of the fire into his neighbour's backyard.

"It was a bit scary yesterday [Sunday] afternoon," he said.

"I watched a gas bottle fly over my house, which is about 500 metres away.

"It hit the side of a neighbour's shed; we all watched it come over and hit the side of his shed.

"It was a pretty scary thing.

This gas cylinder flew 500 metres from the fire and hit a residential shed. ( Supplied: Garry Keeffe )

"It wasn't the only one, several went off."

Mr Keeffe said it was a tragic event for the local community.

"The scene before my eyes is total destruction of a building and associated sheds which are just basically flattened into the ground," he said.

"It's going to have some effect in the coming cropping program.

"I haven't had a chance to speak to the owners yet to see which way the shire can assist or whether we can provide them with storage for certain chemicals.

"But it's going to have a very long-term effect [on the community] until some of these guys get back on their feet."

Residents and people staying at a nearby caravan park who were evacuated after the fire sent plumes of toxic smoke through the town have been allowed to return.

Saint Mary's School was closed to students yesterday as the Department of Fire and Emergency Services remained on the scene to mop up the area and determine the cause of the blaze.

Roads in the area remain open only to heavy haulage vehicles.