Hundreds of people were evacuated from office buildings, shops and apartments in the block of Moray Pl, Princes St and the Octagon, and almost 80 emergency crew were at the scene, fighting the blaze, treating the injured and undertaking crowd control.
The blaze was at Bracken Court building in Moray Pl, which houses two apartments, offices for eight businesses and organisations, a photography studio, a large area of storage and one bar.
The building is three storeys at the front, but the site slopes away from the street and the building has another two storeys of car parking, below street level, at the rear.
The fire, one of the worst to hit the city in decades, started just after 3pm, in a second-floor apartment. Residents in and around the building reported hearing a bang then seeing flames. An alarm was activated, but there were no sprinklers in the building. No-one in the building was hurt. It is thought up to 35 people are usually in the building during the working day.
Off-duty firefighters and volunteers from Outram, Ravensbourne and Portobello were called in to help fight the fire, which was attacked from the front, above by helicopter and neighbouring buildings on Princes St. It took almost three hours to bring it under control.
It was not clear what was left, but at least the two top floors were destroyed and Chief Fire Officer Dave Seque was expecting some damage to the ground floor.
The roof of the 80m-long building was destroyed and the floor of the top storey collapsed on to the level below. The car-parking area was thought to be intact, but three surrounding buildings - Investment House in Moray Pl and Evan Parry House and the Capitol Building in Princes St - would have suffered some external damage.
It is understood pipes melted, which caused flooding in the Capitol Building. The top floor of Bracken Court was well ablaze when firefighters arrived and the fire spread quickly and burned fiercely, Mr Seque said.
The first crew of five into the building were all taken to Dunedin Hospital by ambulance, with burns to their hands and faces. One was admitted to hospital and four were treated and discharged. The first four were seen rushing from the building minutes after a loud bang, followed by flames leaping from the roof and windows.
They immediately removed clothing and helmets and were doused with water and cold cloths. A fifth firefighter, also one of the first in the building, was taken for treatment later, with a singed lower back, probably from a smouldering coal.