Crews are at the former GKN site on Crossfield Road where large plumes of smoke can be seen rising from the building.
The industrial units have been out of use for a number of years, with the site’s most recent guise coming as a temporary parking area for the neighbouring Lichfield Trent Valley station.
Witnesses say five fire engines and other emergency services are dealing with the incident.
Staffordshire Police say motorists should avoid the area.
A spokesperson for the force added: “Road closures are in place around the area of Crossfield Industrial Estate, off the A5127 Burton Road, as a result of the fire.”
Residents living in the Streethay and Boley Park area are also being urged to keep windows closed.
See more pictures of the fire in our gallery.