Residents from Annie Street, Milford Street, The Avenue and part of Robert Street were offered sanctuary in Albert Street's Goodlife Church as crews battled the Annie Street blaze, which erupted about 2.30pm.

The flames were seen across the harbour, which police said led to an influx of repeat calls from nearby suburbs about the "very visible" disaster.

A Fire and Rescue NSW spokesperson told the Newcastle Herald about 15 fire crews were sent to the Annie Street scene after the first call came in - via an automatic smoke alarm - just after 2.30pm. Within hours more than 100 firefighters and 30 trucks were on scene, setting up an exclusion zone.

UPDATE: Firefighters declare victory in keeping flames off fuel depot

More than 100 firefighters and 30 trucks were on the scene, the service said in a statement shortly after 4.30pm.

Crews set up an exclusion zone for safety as the blaze in "a four-storey mega warehouse" continued to rage hours after firefighters helped evacuate workers.

The site is a former wool shed now being used as a storage business.

The storage property backs onto the Ampol fuel storage facility, which distributes gasoline and diesel via fuel trucks.

Gas and electrical utilities were isolated, while crews were working to protect the oil terminal from any potential ignition.

Fire and Rescue NSW urged anyone with respiratory conditions to limit their exposure to smoke outdoors and seek medical help or take relief medicine if short of breath.

Residents should remove clothes hanging outside and shut their window and doors.

The Fire and Rescue NSW spokesman said the fire had broken out inside a building containing storage units and firefighters were working to contain the blaze.

Difficult access meant that crews were employing defensive firefighting tactics about 3.30pm.

There has been an influx of repeat calls, given the fire is "very visible", with the smoke able to be seen across the harbour.

A Newcastle police spokesperson said people are being urged to avoid the area.

Police said officers have evacuated residents in Annie Street and Milford Street as a precaution and several surrounding roads have been closed.

They said the fire had been contained to the building.

Some residents in nearby streets have decided to leave of their own accord.

The Newcastle Herald reported last March that planning authorities knocked back a huge apartment project at the self storage site over fears the neighbouring fuel tank could explode.

Giverny Burke, who lives on Robert Street - the road parallel to Annie Street - with her partner, came home after she saw "this big black cloud of smoke" in the direction of her house, while working at a Suspension Espresso in Islington.

She had been home for 10 minutes before police asked her and her neighbours to evacuate.

"In that 10 minutes it started out black with a lot of smoke and then you could basically see through the building. It was red and we were sweating because it was so hot," she told the Herald.

"t was like properly on fire."

For residents heading home just a day after horrific scenes of flooding in the state's north, it was the last thing they expected.

"As I got to an intersection near the Tighes Hill bridge there was a lot of people pulled over and getting out of their cars, which created traffic delays," one Maryville resident said.

"I didn't know why at first and looking over in that direction, it was hard to pick up. It was like some of the clouds were different.

"Then I realised it was smoke, and you could see flames from a long way off, which seems strange in a suburban neighbourhood in the middle of a downpour

"What it looked like was almost like a plane had come down in the neighbourhood. As you got closer it got brighter, and I had no idea what it was."

The resident said the fire's proximity to the Ampol depot was concerning but they would wait for advice from police or other emergency services.

"It is a bit of a worry," they said.

"We know someone who lives in the apartments opposite, and you'd always worry about someone's home who's right next to it, but even half a kilometre away you don't know the combustion of a fuel storage and it's not something you like to think about."

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