You are not permitted to download, save or email this image. Visit image gallery to purchase the image.
Emergency services rushed to the High Flyers building on the corner of The Square and Main St on Monday evening as smoke poured from the building.
The blaze was brought under control in about 40 minutes. Smoke damage is visible at its eastern end.
Fire and Emergency Manawatū-Whanganui group manager Gary Ward said the fire was initially being treated as suspicious because the building was unoccupied.
"The specialist fire investigators should be back there today with their colleagues from the police. We don't have a timeframe with the investigation at this stage."
The Edwardian former city post office has been empty since 2017 and fallen into disrepair in recent years.
But Ward said firefighters understood people had been going inside the two-storey building.
He was not aware of any structural damage. He said fire crews suppressed the blaze quickly and then climbed inside to extinguish it.
Next door, Downtown Palmerston North shopping centre was evacuated when its fire alarm went off because of the smoke from High Flyers.
"The smoke was going everywhere," centre manager Greg Key said.
"You should definitely smell it and it looked as though there was a bit of a haze inside the centre from the wind blowing it in."
The mall's retailers were allowed back inside the building just over an hour after the blaze started to close their shops, and the multi-storey car park later reopened.
After its long tenure as the city post office, the building became a popular night spot from the mid-1990s to mid-2010s, including the High Flyers bar, which closed in 2013.
Over the past decade developers have planned a bus station, hotel, retail space and conference venue on the site, but none has gone ahead.
The building has been deemed unsafe to enter and all its windows are either broken or boarded up.
It is owned by Palmerston Post. Its Auckland-based director and major shareholder Alan Moyes declined to comment.
The 4032sqm section has a land value of $2.83 million and a capital value of $2.87m.