More than 100 firefighters are on the scene of the fire on Hickson Road, a NSW Fire and Rescue spokeswoman said.

"There's a large amount of construction formwork alight in the basement," she said.

"The fire is now threatening a crane on the site. There are concerns it may fall."

No injuries have been reported and neaby buildings up to the Western Distributor have been evacuated amid fears the crane could collapse into the buildings.

The spokeswoman said the flames had spread to two levels of formwork since the fire was first reported by numerous members of the public around 2pm.

Superindentent Ian Krimmer from NSW Fire and Rescue said the main concern for crews was ensuring the stability of the crane, approximately 50 metres tall, now that the area had been evacuated.

"We have to treat this as a worst case scenario," he said.

"The collapse of the crane is not imminent, but we have to prepare for that eventuality should things turn worse."

A spokeswoman for NSW Police said officers are also onsite.

The cause of the fire has yet to be determined.

SBS reporter Manny Tsigas is on the scene, reporting heavy and increasing smoke coverage.

Smoke from Barangaroo fire seems to be intensifying @SBSNews pic.twitter.com/fx5Ig313DQ — Manny Tsigas (@mantsig) March 12, 2014

Office worker Shellee Murphy-Oates has been evacuated from the nearby KPMG building, a stone's throw away from the construction site.

"We had noticed that fire had broken out at half past two. There was very thick smoke coming up that's covering the building we were in," she told SBS.



"There were only a couple hoses on the fire at the time and since then, I don't know, 10 other fire trucks have arrived at the scene."

She says people are calm but the scene is still chaotic.

"There's lots of police, everyone is confused as to what their supposed to be doing.

"Everyone is kind of milling around wondering where we're supposed to go, what we're supposed to do."

Ms Murphy Oates says they're awaiting instructions so they can resume their work.



"It's pretty exciting actually getting evacuated from the [nearby] building. Hopefully they put the fire out soon and we can go back to work."

The Environment Protection Authority has also ruled out potential asbestos hazards as a result of the blaze.

"We don't have any concerns" about asbestos, an EPA spokeswoman told Fairfax Media.

Emergency services have closed the Western Distributor between King Street and Sydney Harbour Bridge Southern Toll Plaza. Motorists are urged to avoid the CBD as traffic is diverted. Major delays are expected.

Sydney bus ticket holders are also advised they can use their tickets on Sydney trains as the fire continues to impact on the bus network.

More details to come.

Not looking good “@SydneyLive2GB: Photo of the crane on fire at #barangaroo pic.twitter.com/yf6ehi7KgT” — Daniel Ostermeyer (@dostermeyer) March 12, 2014