Police said they were called to help crews fighting the "suspicious" blaze at the former Glamis Hospital in Montpellier St about 4am today.
Roz Turner, who lives in nearby Queens Dr, told the Otago Daily Times she was woken by the sounds of the firefighters and police, and by the time she saw the blaze it had already engulfed the building.
"Just to see the power of it, it was amazing."
Because her home was a safe distance from the fire, Mrs Turner said she never felt the need to evacuate and the presence of the firefighters gave her a sense of safety.
"They did an amazing job, I don't know how many crews there were, but it was really impressive seeing the firefighters in action."
Mrs Turner said she had been living at her Queens Dr home for about 10 years and there had never been any issues with the old building before.
Glamis had been used for aged care for about 20 years.
Fire services, including an inspector, were working at the scene.
Roads were likely to remain closed for most of the day and diversions were in place at the following intersections:
• High St and Queens Dr
• Serpentine Ave and Queens Dr
• Montpellier St and Alva St
• Serpentine Ave and William St
Police asked people to be patient if they experienced delays.
They believe the fire to be suspicious and a scene examination would be carried out today.
- By Tim Miller and ODT online
