The fire, which caused no injuries or loss of significant assets, started about 3pm at Leigh Court and crossed the Colac-Ballarat Road before being contained about an hour later.

Ten Country Fire Authority (CFA) crews and two heavy tactical aircraft - one each from Ballarat and Colac - helped extinguish the flames.

CFA Incident Controller Dave Stephens said there was "massive fire behaviour" for such a benign day. 

"The conditions were a quarter of what they could have been," he said. 

The fire was contained in paddocks on the eastern side of the highway before it headed into thicker bush further east near McKays Lane and Thorntons Lane.

The CFA urged Dereel residents to leave their homes before the fire was brought under control. 

Firefighters were dousing burning tree stumps along the Colac-Ballarat Road at 5pm and the road remains closed because of falling tree branches.

Mr Stephens said a full roadblock was in place and he expected the road to be partially blocked as clean-up operations continued throughout the night.

Local Rick Olsson spotted the fire before the CFA arrived and tried to stop the fire crossing the main road. 

"I just popped in the ute with my knapsack with water in it and started trying to put it out," said Mr Olsson, who added neighbours armed with a hose were doing the same from the other side of the highway. 

Mr Olsson, who has seen three significant fires in under 12 months, said the CFA did a good job containing the fire before it headed further east. 

About 50 CFA volunteers attended the scene and Mr Stephens expected the clean-up operation to last a number of days. 

Police and CFA investigators were also at the scene.