An eyewitness said the blaze was lighting up the sky above the town.
Fire and Emergency New Zealand was alerted to the fire at Milner Park at 7.17pm.
Crews from from Oamaru, Weston, Glenavy and Waitati Fire Stations had responded.
The public were urged to avoid the area and the police had been called on for traffic control, he said.
The cause of the fire was not yet known.