RENOWNED Cygnet cafe the Red Velvet Lounge has been devastated by fire.

The Tasmania Fire Service was called to the blaze in the Mary St building just before 7pm yesterday.

Cars and pedestrians were stopped while crews fought the fire with the help of five tankers and a pumper.

The cafe, owned by award-winning chef Steve Cumper, was fully engulfed in flames.

Onlookers were visibly distressed as fire tore through the building.

Damage worth hundreds of thousands of dollars was expected.

But fire crews managed to save neighbouring buildings.

Huon MLC and former mayor Robert Armstrong, who lives nearby, said it was a blow for Cygnet.

“It’s certainly an iconic building in the town. It brings so many people into the town. I meet friends of mine there every Saturday morning,” Mr Armstrong said.

“It’s going to be a big loss if it’s out of action for a long time. Let’s hope it can be repaired and quickly, so it’s ready for the tourist season and the Cygnet Folk Festival in January.

Cumper, known for his use of local produce, was thewinner of Country Style magazine’s first National Country Chef of the Year.

Among accolades far and wide, the cafe was included in a Wall St Journal article this year.