An MFB spokesman said firefighters were called to the Holy Church of  the Annunciation of Our Lady about 1.40pm on Monday, after passing police saw smoke billowing from the church windows and roof.

About 200 people evacuated from nearby buildings when the fire took hold. Part of Victoria Parade was closed for several hours before re-opening to traffic about 4.45pm.

The church, at the corner of Victoria Parade and Lansdowne Street, was built in 1901 and is listed on the Victorian Heritage Register. Firefighters from the nearby Eastern Hill Fire Station arrived within minutes, forcing entry and bringing the blaze under control about 30 minutes later.

The Very Reverend Father Kosmas Damianides said he was "very distraught".

Father Damianides said he had not yet been able to enter the church's interior, but believed icons on the ceilings and walls would have suffered smoke damage.

"That's going to cost a lot of money," he said. "That's a great loss for us. The church is 115 years old, so there were a lot of icons that were very old in there."

Damage to the outside of the building had been minimal thanks to the speed of emergency services, he said. Several windows had to be smashed during the firefighting effort.

A building surveyor is now assessing the structural integrity of the church, and firefighters are using thermal imaging cameras to ensure all hotspots have been extinguished.

The cause of the fire, and the damage bill, is yet to be determined.