A Fire and Emergency New Zealand spokeswoman said the structure fire occurred in two plant rooms of a sawmill in Steadman Rd.
Crews arrived at the scene at 1.30am and spent several hours at the scene before the blaze was extinguished.
Crews from the Mosgiel, Roslyn, St Kilda and Lookout Point stations, along with a turntable ladder from Dunedin City attended.
The fire was deemed to be suspicious and is believed to have caused extensive damage.
It has been referred to police and an investigator would be at the scene this afternoon.