A Fire and Emergency New Zealand spokesman said it received multiple calls at 1.18pm of a large vegetation fire at the Kawarau Gorge end of the Gibbston Valley Highway.
Two helicopters and ten fire appliances are fighting the fire.
The fire spanned about 200m by 100m.
Two structures were initially threatened by the fire, but at 3.30pm a spokesman said it had been brought under control.
Crews were now working to fully extinguish the blaze.