An oil fire which started in the kitchen of a Chinese restaurant inside a high-rise building in Sydney’s CBD has been extinguished after earlier blanketing parts of the city in smoke.

Fire fighters say the kitchen will not be useable for some time due to the damage from the blaze, which caused the ceiling to cave in.

Several fire trucks were dispatched to the scene on Castlereagh Street at about midday and quickly put out the fire, which they believed was an electrical fire.

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Everyone inside the building and in a residential building next door was evacuated.

The restaurant is located inside the Castlereagh Club and smoke billowed out through the roof of the residential tower above the club.

Fire and Rescue NSW has tweeted that the building is smoke-logged.

The street remains closed from the Park to Bathurst Street intersections.

Station commander at Sydney city fire station Tony Camilleri said the fire was extinguished quickly.

“When we arrived here there was a sprinkler activated in the restaurant and that, along with the efforts of the crew extinguished the fire,” Mr Camilleri said.

He said the roof of the building had collapsed due to water escaping from the sprinkler system.

“The ceiling has collapsed in that area of the kitchen and the other damage is from heat and smoke and water that we sprayed around the kitchen.

Fire in downtown Sydney. Looks to be under control now. #Sydney2016 #drama #viewfromtheeye pic.twitter.com/jxWrAQxDmX

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“The room itself was probably about 10 metres by 3 metres, but the damage is down to a 2-metre by 2-metre area.

“That side of the kitchen won’t be able to operate. We’re in the process of salvage work at the moment.

“The idea of our salvage work is to get a business up and running as quickly as possible.”

Mr Camilleri said firefighters were still inside the building finishing their work.

“We’re not sure if we will get the whole kitchen up and running, but we’ll be doing our best.

“The key message for residents is don’t put water onto a burning oil fire. It’s dangerous and causes injuries.

“Please have a fire blanket in your kitchen and a smoke detector and be ready to put your lid back onto the pot or your fire blanket used to extinguish the fire and not cause injuries.

“Water on a burning oil fire accelerates the fire and usually causes bad injuries to the person who’s put the water on the fire.”

Mr Camilleri said fire fighters run education programs to make sure people know what to do in case of particular types of fires.

“We will target this person and make sure if that happens again, he’ll know more what to do.”