A massive fireball was seen bursting into the sky from a giant shed ablaze in Palmerston North today.

Firefighters have now got the large blaze at the "We Buy Cars" building on Keith St under control.

Fire and Emergency were called to the fire at 11.55am after the 50mx50m building caught on fire.

Footage of the explosion shows the moment a ball of flames shot into the air while the building went up in flames.

Witness Hayden Voice told the Herald he saw the explosion around 30 minutes after authorities were alerted to the fire.

He said he couldn't believe what was unfolding before his eyes.

"I was about 250m away and pulled over, when the flames went up I thought 'that can't be real. What am I looking at?'

"The building that caught fire is a two-storey building, and these flames were going up about four to five storeys high. It was insane."

Footage of the explosion shows the moment a ball of flames shot into the air while the building went up in flames. Photo / Hayden Voice

St John's Ambulance said they took someone to Palmerston North Hospital with moderate injuries just after midday.

Six fire trucks were called to the scene.

The roof of the large iron corrugated shed collapsed and explosions were heard from inside.

A car inside the garage had also caught fire, according to police.

A man said he was at the site buying a ute when he heard yelling.

He ran to help put out the small fire, but says it reached an LPG tank and blew up in front of him.

The man believes a worker was using a tool near fuel that may have sparked the fire.