Major fire destroys Melbourne nightclub, warning of smoke hazards ...

A ferocious fire that destroyed a Melbourne nightclub overnight and has left one of the city's busiest street closed is being treated as suspicious.

The blaze at the LUX Nightclub in a two-storey building on Chapel Street broke out about 1.50am today and took firefighters about two hours to bring under control.

Fire Rescue Victoria (FRV) said no one was inside when the fire started, and firefighters arrived at the scene within five minutes of receiving triple-zero calls.

Fifty firefighters and 15 fire trucks were deployed to battle the blaze.

This morning a community health warning remains in place for smoke in the area.

Local residents who have breathing difficulties are being urged to stay indoors.

"Chapel Street is expected to remain closed until mid-morning as there are structural issues with the fire-affected building," said FRV.

The area is one of Melbourne's busiest shopping, restaurant and nightclub districts.

A major police and firefighter presence remains on the scene this morning, with the fire being treated as suspicious and a crime scene established.

A police arson chemist is expected to arrive there later this morning.

Callers to radio 3AW said they saw men in balaclavas running from the building, but that information is yet to be confirmed by police.