Chemical explosion sparks large factory fire in Derrimut, in ...

More than 30 fire trucks are responding to a large factory fire in Derrimut, in Melbourne's west, where hazardous material and unknown toxins continue to burn.

Fire Rescue Victoria said there had been a large chemical explosion at the factory on Swann Drive, resulting in a significant fire.

Ambulance Victoria said all factory workers were believed to be accounted for.(Supplied)

Crews arrived at the scene about 11:20am, and are working to bring the blaze under control using specialist appliances and aerial equipment. 

Additional appliances are also being deployed to the scene.

Masses of smoke can be seen billowing across the sky from suburbs in Melbourne's west and east.

Near the scene, the ABC saw a charred barrel flying into the air from the fire, and landing a few hundred metres away. 

Warnings have been issued for surrounding suburbs. 

Anyone in areas affected by the thick black smoke has been urged to take shelter indoors immediately, and close all exterior windows, doors and vents. Heating and cooling systems should also be switched off.

The smoke has prompted a warning for surrounding suburbs.(ABC News: Rachel Clayton)

The ABC understands the fire is at the site of the ACB Group factory, where a worker died in a chemical explosion last year.

Ravenhall worker Trent Chamberlain told the ABC he could see "thick, thick black smoke" from his office roughly three kilometres away.

"And every few minutes, a large fireball explosion [high into the air]," he said.

"It's still billowing out smoke, quite heavy black smoke, so it's clearly not contained … it looks really bad."

Ambulance Victoria said paramedics had been at the scene since 11:15am.

Victoria Police said there had been no reports of injuries and it was believed everyone inside the factory had been evacuated safely.

The view from reader Adam Chesters' St Kilda apartment, where he can see smoke and fireballs from the Derrimut blaze. (Supplied: Adam Chesters)

Swann Drive is closed to traffic, and outbound lanes of the Western Freeway are closed between the M80 Ring Road and Robinsons Road.

The Department of Transplant and Planning said motorists should use Ballarat Road [Western Highway] to avoid road closures.

Meanwhile, with power failures impacting traffic signals in the area, drivers have been reminded to follow the same give way rules as they would at any intersection with a stop or give way sign.

The view from Swann Drive.(ABC News: Rachel Taylor)

The local community has been urged to avoid the area to let emergency services do their job, and motorists have been warned not to stop on high speed roads to watch the fires.