Sri Lanka Navy and Air Force teams have been deployed to douse the fire at the Salawa Army Camp at Kosgama, Avissawella.
The fire brigade teams are yet to reach the camp.
Some residents in the area said loud explosions were heard as the fire broke out.
Military sources said the fire broke out at the warehouse of the Army camp. The incident occurred around 6 pm, on Sunday.
Measures are being taken to evacuate residents within a 6km radius of the camp. Police have closed Colombo - Avissawella road from Puwakpitiya to Kaluaggala.
Residents in the area who spoke to Asian Mirror over the phone a short while ago said the fire is still breaking out. They also said debris of the Army hit the Colombo- Avissawella, which was closed immediately after the fire broke out.