A man has been critically injured with serious burns to his hands and arms after allegedly igniting a gas bottle at a Canberra fast-food restaurant.

Police allege the 41-year-old man was mentally ill and entered the McDonald's restaurant in Braddon about 9:00pm carrying a nine-kilogram gas bottle, which he then ignited.

The Giralang man was flown to a hospital in Sydney overnight with critical injuries to his arms and hands.

Fire and Rescue chief Mark Brown said apartments above the restaurant and surrounding streets were closed.

"Upon arrival there had obviously been some sort of damage to the building," he said.

"There was a very strong smell of gas but not sign of fire at that stage and upon further investigation it was found one person had suffered serious burns to their arms and hands."

No-one else was hurt in the incident.

Residents and workers shocked to hear of explosion

James Court resident Beatriz Vivaco-Laime was shocked to hear about the explosion in the same building she lives in.

She was out visiting friends when the incident occurred but received calls from concerned family members.

Former McCafe worker Jane Bennett wanted to visit the scene after hearing about the McDonald's explosion on Facebook. ( ABC News: Adrienne Francis )

"My sister called me, and also my daughter from Melbourne to ask if I knew about the fire in the McDonald's underneath," she said.

"I was in shock, things like that don't happen.

"I think my neighbours were all evacuated from the apartments before 10:00pm, and came back afterwards."

Former McCafe worker Jane Bennett came past to see the damage after hearing about the explosion from colleagues on social media.

"A lot of my friends who worked here that night were posting photos [on Facebook] about some man trying to blow up their workplace," she said.

"All I know is, they said some guy came in with a gas tank and tried to light it.

"Most of my friends weren't terrified, in fact some of them thought it was a bit funny, but I was concerned."

The fast food outlet remained closed this morning while the damage was cleared.

Police said there was no further risk to the community.