Fire Rescue Victoria said crews arrived at Swan Drive at around 11.20am local time to respond to a "significant factory fire" in Derrimut, Xinhua news agency reported.

The fire authority said, "Specialist apparatus including aerial appliances are at the scene. A community advisory warning has been issued for Albion, Braybrook, Brooklyn, Derrimut, Laverton North, Sunshine, Sunshine West, Tottenham and Truganina."

A "watch and act" alert is in place for the affected areas, urging residents to seek shelter indoors immediately, as the wind is blowing "toxic smoke eastwards across Derrimut".

In the current situation, additional equipment is being continuously deployed at the spot to extinguish the fire.

"There are no reports of injuries and it is believed that everyone inside the premises has been evacuated safely," a Victoria Police spokesperson confirmed to Xinhua.

"Traffic is expected to be affected for some time in the area due to the closure of Swan Drive, as well as westbound traffic being stopped on the Deer Park Bypass for safety," the spokesperson said.

Located approximately 17 km west of Melbourne's central business district, Derrimut is home to over 8,000 residents, with the suburb's Swan Drive connecting several distribution centers and warehouses.