A man carrying a gasoline can set himself on fire at a McDonald's restaurant in East Vancouver on Thursday night, prompting people to flee in panic.

Police said the "distraught" man walked into the restaurant at Commercial Drive and East Broadway just after 9 p.m. PT.

A statement said officers tried to negotiate with him, but he ultimately "lit himself and parts of the restaurant on fire."

The man, who police said is in his 30s, survived and was taken to hospital with serious burns. His name wasn't released.

The Independent Investigations Office of B.C. — an independent, civilian-led police watchdog — is now investigating.

Vancouver police set evidence markers down outside the McDonald's restaurant on Commercial Drive near East 12 Avenue. (Cory Correia/CBC)

Carla Arsenault was in the area as the incident unfolded.

"There was a man sitting outside the McDonald's … I noticed that he had a can of gasoline. I could smell the gasoline," she said.

Arsenault said she called the non-emergency police line just before the man ran inside the restaurant.

She said he started shouting, then began pouring gasoline.

"People started panicking and rushing out of the McDonald's," said Arsenault. "It was quite busy, and people started just flowing out ... I could see that the staff were rushing out the back.

"I saw people kind of jumping, 'cause I think they had to jump over gasoline as they were running, and kind of jumping past the man and past the gasoline to get out of the building."

Fire crews walk into the McDonalds on Commercial Drive on Thursday, after a man lit himself and the restaurant on fire. The provincial police watchdog has been called to investigate the incident. (CBC)

Arsenault said the man then rushed to the back of the building and squatted down with a lit cigarette.

The witness said police spent nearly an hour outside the McDonald's, which was also partially damaged from the fire.

The police statement said officers used non-lethal, riot-control ARWEN guns to subdue the man. Fire crews extinguished the flames.

There was also significant damage to the inside of the McDonald's. (Cory Correia/CBC)

Arsenault said the incident was surreal.

"I'm concerned for the man, and feel badly for all the people who were in the restaurant at the time, because it would have been very frightening."

Commercial Drive from East Broadway to East 12th Avenue closed to traffic for hours after the incident.

The IIO is called in whenever there is an officer-involved incident resulting in death or serious injury. The unit said it would provide more details later.