The alarm was raised by staff at a nearby bingo hall who spotted the flames on the roof of Envy Nightclub.
Detectives are working to determine whether the fire was deliberate or accidental.
Detective Sergeant Gavin McLaughlin said: “Police became aware of a fire at Envy nightclub just before 7pm on Thursday evening.
“Officers attended immediately and evacuated nearby properties and closed a number of roads.
“NIFRS personnel and police officers have been in attendance throughout the night and remain at the scene this morning.
“Enquiries are currently ongoing to determine the cause of the fire.
“Members of the public are reminded to avoid the area and to allow extra time for their journeys due to ongoing police diversions.
“I would ask anyone with information which could assist us with our enquiries to contact detectives at Strand Road on 101 quoting reference number 1523 09/01/20.”
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