UPDATE:
A police spokeswoman said one lane has now been opened and the Taupo Regional Council is dealing with the clean up.
UPDATE:
Senior Sergeant Fane Troy said they didn't know what caused the fire but the truck driver got out safely and no one was hurt.
"It's still pretty hot in there, we still need to clean down the road and dampen things down, so I'm not too sure how much longer the road will be closed."
Mr Troy said fire safety officers would now investigate the matter.
EARLIER:
A truck is on fire south of Taupo causing State Highway 1 to close.
A police spokeswoman said the fire was near Waitahanui and started about 11am.
She said police had set up a diversion through Turangi and were asking people to avoid the area.
"Things are exploding in the truck and firefighters are waiting for more water to arrive," she said.
Fire services are currently trying to extinguish the truck, which is carrying mainly paper products.
Police are encouraging motorists heading north to take the SH41/32 junction at Turangi if they want to continue to travel north while the road is closed.
The road is estimated to be closed at Waitahanui near Turangi for at least an hour.
A reporter at the scene said the road was closed and traffic was banked up a long way.
"I can see is a plume of smoke in the distance."
The Government has no concerns about the development on state land in Ngongotahā.