Emergency services were called to the Pall Mall Arcade building in Dee St on September 6 when six people were evacuated.
All of them were treated for smoke inhalation, and a 10-year-old boy was taken to hospital for treatment after suffering severe burns to his face and limbs.
Fenz district manager Julian Tohiariki said yesterday investigators concluded their inquiries and determined an electric blanket was the cause of the fire.
There were working smoke alarms, but not in every room.
"This is a great reminder to check the condition of your electric blankets and never sleep with your electric blanket turned on.
"Fire and Emergency New Zealand recommend installing a smoke alarm in every bedroom, hallway and living area.
"Having sufficient smoke alarms is your best early warning for a fire."
Traffic diversions were still in place in Dee and Spey Sts yesterday.
Invercargill City Council interim consents and compliance group manager Jonathan Shaw said the diversions were in as a safety measure.
Compliance officers had been working closely with the owners to continue protecting the public and surrounding properties.
The owners had engaged with a structural engineer, who was assessing whether the building was considered dangerous or insanitary under the Building Act 2004.
"The building owners have not yet indicated any intention on the future of the building while they are completing due diligence after the fire."
The diversions would remain in place to ensure public safety while the assessment was being completed, he said.
