Emergency services were called to Foundry Street just after 3.40am on February 15 to Newcastle Auto Electrics.

Several NSW Fire and Rescue units were sent to the scene, including 12 fire trucks and about 40 fire fighters. Crews remained at the site at 7.30am working to extinguish the blaze.

There was an earlier threat of the fire spreading to neighbouring properties, but crews managed to get the blaze under control.

Nearby residents were warned of smoke pollution from the site and traffic diversions were put in place with motorists urged to avoid the area.

"Residents in the Newcastle suburb of Wickham are advised to keep their doors and windows closed as crews battle a large fire in an auto-electrical business," a statement from NSW Fire and Rescue said.

"The roof of that 200m by 200m building has collapsed as a cloud of thick, black smoke envelopes the area.

"An exclusion zone has been established. FRNSW is urging Wickham residents to keep their doors, windows and vents closed to prevent infiltration by the hazardous smoke."

Officers from Newcastle City police have established a crime scene and commenced inquiries into the incident. Investigators from the NSW Environment Protection Authority have also arrived on scene to monitor the water run-off alongside the Port Authority. Fire crews have also sent a drone up over the site to survey the area.

The cause of the fire is unknown at this stage.

"When our crews got here they were confronted by significant fire activity, with flames and smoke pushing out through all of the vents, NSW Fire and Rescue Superintendent Adam Dewberry told a press conference at the scene on Thursday.

"That fire had taken hold, we worked out early that this is an auto electrical workshop with numerous vehicles involved in fire. High fuel loading, with this fire starting to push into adjoining occupancies. Fire fighters concentrated that first effort on stopping the fire from spreading and those efforts probably saved about 10 or 12 separate occupancies from being impacted by fire."

He said it took two hours to get control of the blaze and more than 30 cars were destroyed during the incident. There were initial concerns when the building's roof collapsed that it was made of asbestos, but fire crews later discovered it had been replaced with a metal roof recently.

Crews were still monitoring hot spots and mopping up on site at 9am.

Car owners awaiting news of their vehicles had started to show up to the scene on Thursday morning.

Newcastle Herald reached out to Newcastle Auto Electrics for comment, but the business owners were unable to speak during this "devastating time".

The business did release a public statement on social media:

"We regret to inform you that due to an unforeseen fire incident, our premises will be closed for trading until further notice.

"The safety of our staff and customers is our top priority, and we are grateful that everyone is safe and the amazing support of emergency services who were able to get the fire under control.

"We apologize for any inconvenience caused and appreciate your understanding during this time. Rest assured, our team is working tirelessly to assess the situation and ensure that we can resume operations as soon as possible. Please bare with us during this devastating time, we will reach out to everyone in due course. Thank you for your continued support and patience."

As inquiries continue, anyone with information about the fire is urged to call police or leave information with Crime Stoppers on 1800 333 000.

It comes two years after the massive inferno that engulfed the Woolshed at Wickham, a moment local residents will never forget.