A huge fire engulfed a popular Adelaide Hills restaurant on Tuesday night, with damage estimated at more than $2m.

Around 70 firefighters were sent in to battle the inferno at the The Mustard Seed restaurant at Hahndorf.

The blaze broke out in the town’s main street at 8.30pm, with firefighters arriving to find the restaurant fully alight.

It would normally be open on a Tuesday night until 9pm, but The Advertiser understands the store was closed when the fire took hold.

The restaurant is located at of the entrance to a mini golf attraction, a popular tourist spot.

Local Graham Kaesler, who lives just 400m away, said the blaze was intense with flames visible above rooftops.

He said he was at home watching TV when he heard sirens he first thought was part of a television show.

“My brother-in-law rang and said ‘The Mustard Seed is on fire’ and I stepped outside and it was fully involved … you could see flame coming out from under the eaves.”

Mr Kaesler, 76, said the property – a former home converted into restaurant – had significance to his family.

“My grandfather’s brother used to live in the building and my cousin grew up here,” he said.

Mr Kaesler, who used to run an engineering business just metres away from the fire and also served as a CFS volunteer in town for years, said the fire was the biggest in the main street in recent memory.

“They’ve done a good job to keep it from spreading because it was really going,” he said.

Hahndorf Business and Tourism Association secretary Sarenah Gallasch said the building was heritage listed, along with the Main Street since the 1980s.

She said the community was in shock.

“I drove into the town last night and all I was met with was red at the blue lights – it was pretty overwhelming,” she said.

Ms Gallasch said she had only recently had a conversation with the business owners about their operations was planning a follow up chat in the coming days.

“I think most businesses have been suffering since Covid … This is a tourist town, but we have people walk the street, but not necessarily spend the money,” she said.

“We thought that she would give us a call this coming week and we’d drop in and say hi and just get some feedback from them personally, but never got that chance.”

Damage to the restaurant has been estimated at more than $2m, according to CFS.

A spokesman for the service said CFS volunteers with support from MFS have controlled the fire but will remain on the scene for several more hours to ensure the blaze is completely extinguished.

He said firefighters have been able to prevent the blaze from spreading to neighbouring buildings.

Locals on social media reported flames bursting from the windows.

“Throwing everything at it, trucks from far and wide,” one person posted on Facebook, while another said: “Bloody heartbreaking. For the people, building history, owners and neighbours.”

Another person said: “Pretty bad. Worst I’ve seen. Fire out of all the windows.”

Mount Barker District Council mayor David Leach said it is a great local restaurant.

“Once again it shows how volunteer firefighters step up to serve this community,” he said.

“The council will support the owners to get back on their feet.”

The restaurant was closed and empty when the fire broke out.

The Mustard Seed, serving Indian and Mediterranean cuisine, also has restaurants at Mount Barker, Murray Bridge and Cairnlea, Victoria.

SA Police said Mount Barker Rd between Pine Ave and Auricht Rd has been closed.

Fire cause investigators and Hills Fleurieu detectives went to the scene and investigations are continuing.

Investigators would like to speak with anyone who saw any suspicious activity in the area or who may have CCTV or dashcam footage.

Police urge them to contact Crime Stoppers at www.crimestopperssa.com.au or on 1800 333 000. You can remain anonymous.