A major vegetation fire has broken out near Walter Peak station on the shores of Lake Wakatipu, sending smoke billowing over Queenstown. 

Fire and Emergency NZ (Fenz) said it was tackling the blaze with two helicopters equipped with monsoon buckets, attempting to protect the historic homestead and gardens. 

A helicopter works to extinguish a fire near Walter Peak High Country Farm. Photo: Supplied / Steven Matthews

More aircraft are reportedly on the way to the scene. 

“Firefighters from Frankton and Glenorchy are being airlifted on to the fireground while crews from Mossburn are travelling by road,” Fenz said. 

There is no road access to the area from Queenstown. 

Fenz said the fire was a result of a controlled burn last Wednesday reigniting. 

Assistant District Commander Nic McQuillan said initial efforts were focused on protecting the homestead.

Fenz said the fire was also spreading rapidly up the steep slopes of Mount Nicholas.

Aucklander Steve Matthews was with his daughter on holiday when they witnessed the fire from a boat in Lake Wakatipu.

"On the hill, it looked very involved. Apparently, they had a controlled burn . . . and while we were there, it just got out of control."

"I'm not sure how close it was, but from a distance it looks close, but I think there's a bit of a safety zone, but still, if the wind changed, the homestead could have been all over rover," Mr Matthews said.

Tourists on board a boat in Lake Wakatipu take photos of the blaze. Photo: Supplied / Steven Matthews

"I think the company did really well getting everybody out off the water and back to Queenstown. We're just hoping that everybody is safe.

"You can hear the sound of the pine trees crackling as you're standing there. It's quite unnerving and scary, really.”

Smoke from the fire is blowing across Lake Wakatipu towards Jacks Point and Hanleys Farm, and is likely to move towards Queenstown.

Residents in areas affected by the smoke are advised t keep doors and windows closed to avoid exposure.