Firefighters have been battling a blaze in Shelly Bay on Wellington's Miramar Peninsula.
FENZ said crews had mostly extinguished the blaze and were dampening down the site.
Shift manager Alison Munn said they received multiple calls just before 3am to a warehouse on fire.
She said the fire at the 40 metre by 50 metre warehouse was "well-involved" when they arrived.
Fire crews would be at the scene for some time, she said.
The fire in the derelict Sawtooth Building left only charred vertical beams.
Asbestos warning
FENZ has issued a warning residents about the risk of asbestos in the fire.
People living around and above Shelley Bay are urged to keep windows and doors closed as a precaution.
FENZ said the risk of asbestos was low because the site was wet, but as it dried during the day there was a risk asbestos might get into the smoke.
The Wellington Harbourmaster placed an exclusion zone on the area while it was assessed for asbestos risk.
"We're just asking boaties to keep clear of the Shelly Bay area while they're still continuing to dampen down and assessments are made on air quality," Grant Nalder said.
Police also urged the public to avoid the site, and said they and FENZ would be investigating the circumstances surrounding the fire.
A fire truck with a cherry picker was blasting the smoking remains of the building.
At least four fire trucks were at the scene near the wharves, and a police boat was parked in the bay.
The road around the pensinsula was closed at both approaches to the site.
Wellington iwi Taranaki Whānui are working with The Wellington Company to develop a site at Shelly Bay for housing.
Mau Whenua, a group within Taranaki Whānui, occupied the land for 16 months maintaining the sale of the land was not legitimate. The two groups held talks and began a unification and healing process in April 2022.