Police have declared an emergency zone in Kalkie, Bundaberg East, as a large industrial fire rages on. 

The ABC understands the fire started at the Lindsay Brothers Transport depot on Zielke Avenue just after 3pm. 

The Queensland Fire and Emergency Services said plastic pallets and gas bottles were on fire when their crews arrived at the scene. 

An emergency declaration was made under the Public Safety Preservation Action just after 4pm, which establishes an exclusion zone around Sauers Road, Presslers Road, Bargara Road and Gahans Road. 

Queensland Police said residents within the exclusion zone were evacuated and urged to follow emergency service instructions. 

Nearby residents are advised to keep their windows and doors closed due to large volumes of thick smoke in the area. 

Bundaberg resident Anne Hadley was at her home on Zielke Avenue when the fire broke out and heard multiple explosions. 

"And then I looked up and I could see the black smoke starting to come up.

"There's just explosions continuing, even little ones that you can hear as gas bottles and other things are going up, but this was so big it shook the house."

Ms Hadley said the explosions at the transport depot have continued to go off since after 3pm. 

"They've managed to get some trucks out ... all the workers from Lindsay [Transport] were out on the road when the big explosion went," she said. 

The site of the fire is on the same road as the Kalkie State School and is lined with other residential homes. 

"Fortunately, school pick-up had finished by the time this happened, so by the time police came in and closed the road down, there really weren't took many school people coming in," Ms Hadley said. 

Multiple Queensland Fire and Emergency Services crews are currently on the scene, trying to control the fire and protect nearby properties. 

Motorists are advised to drive with caution and to conditions.