Fire experts have been called in to investigate the cause of the blaze which ripped through sections of the hotel, which fronts Hunter and Auckland streets, last night.

It is believed the fire began in a upper storey of the building, possibly by squatters.

VIDEO: The Civic Hotel was ablaze on Wdnesday night.

Patrolling police saw smoke billowing out of the Hunter Street building after 11pm and called fire crews.

About 30 international students were evacuated from nearby University House.

It took nearly four hours to extinguish the blaze.

It is believed the fire began in a one of the two disused floors above the ground floor hotel, possibly by squatters.

The fire damaged the two top storeys while the bar area suffered some damage.

The pub had been shut about 10pm last night.

Hunter and King streets were shut for several hours this morning as fire crews fought the blaze.

Fire crews will remain on the scene today to take care of possible spot fires.

The building is owned by Newcastle City Council.

A council spokeswoman said the site had now been handed back to council and a preliminary assessment of the damage had been completed.

"There is a possibility of roof sheeting being dislodged if forecasted strong winds eventuate," she said in a statement.

"As a precaution the adjoining vacate site to the East has been cordoned off."

The spokeswoman said insurance assessors would undertake a detailed assessment of the damage.

Detailed structural and technical inspections of the building should be completed by the end of next week.T he council would then determine "the best course of action".