Queens Quay is closed from the roundabout to Harbour Square, and motorists are asked to avoid the area.
The fire broke out at around lunchtime at the Mandarin Palace at Queen’s Quay off Clarendon Street in the riverfront area of the city.
Early indications suggest the blaze started in the kitchen.
Eight fire appliances are at the scene and roads in the area have been sealed off.
Fire appliances outside the city have been readied.