A man has been questioned by detectives over a fire at Sydney's exclusive Finger Wharf.

A yacht and a cruiser were destroyed by $2 million fire at Finger Wharf at Woolloomooloo this morning, and about 100 people had to evacuate their homes.

The boats, a cruiser and a yacht, are now at the bottom of the harbour at Finger Wharf.

Hours later, A 24-year-old man fronted up to Kings Cross Police Station, where he was questioned by detectives, but released pending further inquiries.

Superintendent Tom Cooper says smoke was billowing all over the area.