Sixty firefighters battled a blaze at the Whitireia polytech building on Auckland's Queen St, which closed surrounding roads in the CBD for rush-hour morning traffic.
At least 10 fire engines were called to the scene as thick smoke billowed from the building.
Queen St was closed in both directions between Mayoral Dr and Karangahape Rd, causing
"traffic chaos" just before 8am.
Rema Sunder, a lecturer at Whitireia, said when the building alarms activated everyone thought it was a drill.
"Still we rushed out and when we came down we saw the smoke coming out of the restaurant at the back.
"The fire was observed by a taxi driver and he called 111."
She said some students were happy to be out of class on a Monday morning, but she was just glad nobody was hurt.
"We all obeyed the rules and knew exactly what to do.
Sunder said there was no smoke in the Whitireia area when they evacuated.
"There was a lot of smoke in the building beside it though. It was completely black."
She said there were three or four businesses adjoining the polytechnic; a hair salon, an Indian restaurant and a coffee shop.
"I saw one guy running with an apron but I didn't see anybody else coming out."
She said she didn't see any flames, "but the smoke was really thick".
"There was thick smoke coming from the side of the building and also from the front."
She said the firefighters had done a great job.
"I have been here for 16 years and every year we do a drill but this was for real. It is quite exciting."
Daekwon In, from TS Burger cafe that is part of a block of businesses in the building, initially tried to put out the fire along with a supermarket staff member.
"I was working in the cafe and a guy who was working in the supermarket came to me and asked for help.
"I went inside the kitchen of the supermarket and there was quite a big fire.
"I went and got my extinguisher and tried to stop the fire but the fire was too big and there was a gas bottle on the floor so I was scared.
"There were three or four customers in my cafe so I told them to leave. I then went back inside but the fire was too big so we came outside and by that time the fire trucks had come."
In said at first he had thought the fire alarm was just a practice test, but they had had no warning.
"I am happy I am safe but I am still scared and the fire and what I saw," he said.
"I am worried about the inside because I am working there."
Taxi driver Vinay Kumar described windows exploding with flames licking out of broken panes as fire took hold of the Queen St building.
Kumar was parked at a nearby taxi rank when he saw a small amount of smoke coming from a window.
After peeking through the window he could see flames coming from the floor of the first story.
He called 111 and was still on the phone when the first fire truck arrived.
"By the time I hung up the building was totally engulfed with windows breaking and flames coming out with thick black smoke," he said.
The thick smoke forced Kumar to move his car further from the scene to be safe.
Fire area commander Richard Twomey said the fire started in a kitchen on the third floor of the centre of the building.
"It was quite well involved when we got here and it was starting to spread to the upper floors," he said.
"We have it contained at the moment it's just that the building is heavily smoke logged so we are in the mop up phase at the moment."
Twomey said there were people in the building at the time but they all got evacuated safely.
"When we arrived we were told that there was possibly people in there so we searched the buildings and luckily all the people were out."
He said there were no injuries at this stage.
"We will obviously bring our investigators in and they will do what they do to determine a cause," Twomey said.
"We have quite a lot of resources here. It was a third alarm level so there is about 15 appliances and the best part of 60 of our staff.
"I believe the building is a polytech and it is actually multi-use with restaurants and all sorts.
"We got in nice and quickly and the guys did a great job," he said.
"[When we turned up] around the back there was flame that had blown out through the back windows so it looks like it may have been a bit of a flash fire that got going quite quickly.
"From the windows it spread up the back of the building and entered the other floors."
Twomey said the building would have structural damage and would be shut for some time.
"It is quite a significant fire."
Police said the breach was unacceptable and should not have happened.