Smoke, but no flames, was visible when the Otago Daily Times arrived at the scene about 4pm. Firefighters and the police repeatedly warned up to 100 onlookers to stay back from the fire.
A large section of Green St in front of the school was closed to traffic.
The Fire Service spokesman said the furnishings in the hall had been ''destroyed'', but the hall itself, including the roof, had been deemed structurally sound by an engineer. Speaking earlier in the night, principal David Hunter said he did not know the extent of the damage.
Because of a potential asbestos risk, Public Health South officials assessed the situation. The hall would be cordoned off today, and Mr Hunter did not know how long it would remain shut.
''I have no idea what the inside of the school hall is like. The fire commander hasn't given us any information on that [yet],'' Mr Hunter said.
Until last week, the hall housed the school's temporary library during construction of the new $4.1 million administration block.
''So all our books have been saved - that's some good news.''
The hall also housed a temporary sports office, staffroom, and senior administration rooms, which were all scheduled to shift into the new building this week. Today's NCEA and scholarship examinations will not be affected.
Mr Hunter said a precautionary approach was needed as asbestos would have been disturbed.
''It sounds an old cliche but the safety and health of our students and community is the most important thing to worry about,'' he said.
''We've had the all clear that the school's fine to open up and operate, albeit without the use of our hall.''
Just over a week ago, the school celebrated the official opening of the new administration block. Mr Hunter was philosophical about the situation.
''That's one of the great ironies of life. You take the good with the bad.
''We've had a great few weeks where we've opened up a building, and now we've had to deal with this.''
The Dunedin, Mosgiel, Roslyn, Lookout Point, St Kilda, Willowbank and Outram brigades attended the fire. Breathing apparatus and the command unit were deployed as well.
Mosgiel Taieri Community Board chairman Bill Feather said the fire had come as a shock to the community. The school hall was ''an important part of the school's life'', Mr Feather said.