Fire has destroyed a disused observatory in Canberra's inner-north.

Fire crews were called to the building on Hawdon Place in Dickson just before 6:00am AEST to find it well alight.

ACT Fire Brigade district officer Steve Gibbs says the fire has now been contained.

"There was a lot of smoke when crews first arrived and due to the temperature inversion layer it was quite low to the ground so that's why it went over the suburbs," he said.

It took five crews along with hazardous material specialists to distinguish the blaze.

"This is one of the biggest jobs we've had in Canberra for a number of months," District officer Gibbs said.

"The building hasn't been occupied for a number of years so it's quite badly damaged from people coming in over the years so crews have had to be very careful."

The observatory operated as the Canberra Space Dome and Observatory by the Tradesmens Union Club for two decades before closing two years ago.

Peter Williamson from the Planetarium and Observatory Association of Canberra designed and ran the facility.

He says he is devastated.

"I can't believe this could happen in the nation's capital, that such a fine institution could just be trashed like this. It's so so sad," he said.

Police are treating the fire as suspicious.