Police are now investigating the fire and have appealed for information.
The NI Fire and Rescue Service (NIFRS) attended the derelict premises, where Faughan Valley High School was sited, on Drumahoe Road at 8.17 pm on Sunday evening.
50 firefighters were at the scene at the height of the blaze, with seven pumping appliances and one aerial appliance.
It was put out shortly before midnight.
On Monday morning a NIFRS spokesman said the cause of the fire was “deliberate ignition”.
A NI Fire & Rescue Service spokesperson said: “The fire is in two storey section of the building.
“There are currently 50 firefighters in attendance along with seven pumping appliances, one aerial appliance and a command support unit.
“Operations will continue for some time, and local residents are advised to stay away from the area and keep windows and doors closed while the incident is ongoing.
“Firefighters are working as quickly as possible to extinguish the fire and make the scene safe,” they said.
The PSNI are appealing for information and witnesses to the fire.
Police were called to the scene on Drumahoe Road shortly after 9pm. When officers arrived, Northern Ireland Fire & Rescue Service were in attendance tackling the blaze, which they subsequently extinguished shortly before midnight.
A PSNI spokesperson said: “Fortunately, there have been no reports of any injuries. However, there has been significant damage to the building as a result of the blaze.
“The fire is being treated as arson and we’re appealing to anyone who was in the area at the time and saw any suspicious activity, or has any information, to contact us.”
The number to call with information is 101, quoting reference 1707 03/03/24 or, make a report online via https://www.psni.police.uk/report or Crimestoppers, which can be contacted anonymously on 0800 555 111.
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