The fire at Revesby, near Bankstown, began in a car wrecking yard. Two buildings were destroyed and five were saved. Earlier, nearby businesses and four homes were evacuated.
It took more than 100 firefighters and 25 trucks to contain the blaze.
Two men were working in the building when the fire started, and one was taken to Liverpool hospital with burns to his arms before being transferred to Concord hospital.
Two people were treated for smoke inhalation, but have since been released from hospital.
Earlier today Fire and Rescue NSW commissioner Greg Mullins said the firefighters were in defensive mode as it was too dangerous to fight directly.
He said the fire was particularly dangerous and hard to control because of the high fuel load at the car yard, and very strong winds.
“The stacks can weaken the steel supports and they can fall over — we have very volatile contents so petrol tanks, there’s LPG tanks exploding and struts in shock absorbers etcetera, so lots of explosions,” he said.
Fire and Rescue NSW spokesman Paul Johnston said firefighters cooled a gas tank to prevent it from exploding in the blaze.
“During operations there was an LPG cylinder that had flames impinging on it,” he said.
“It can explode and fragments of that cylinder will be quite dangerous and severely injure or kill people in the vicinity.
“Actions were taken to cool the cylinder during the fire. We’ll continue to cool the cylinder to ensure that it remains safe.”
A remote-control robot was also brought in to fight the blaze where firefighters could not reach.
The robot, one of only four in the world, shoots foam and water into the heart of the fire and can be controlled as far as 500 metres away.
Total fire ban in northern NSW
Dozens of fires are alight across New South Wales and increasing winds from a trough crossing the state have prompted total fire bans for the north coast.
Fire crews have contained a blaze at Castle Cove, on Sydney’s lower north shore, that threatened a number of homes.
A Skycrane helicopter was used to waterbomb the fire.
Thirty residents were evacuated as a precaution as the fire was just metres from homes.
There is heavy traffic in surrounding streets as a result of number of road closures.
An emergency warning for a blaze at Cessnock in the Hunter region was downgraded to Watch and Act at about 5:30pm local time, but has since been upgraded again to emergency level as fires flare again.
A blaze of 2,000 hay bales has been contained at Mulgrave near Richmond, west of Sydney.
Crews are also continuing to battle an out-of-control blaze at Callala Beach in Shoalhaven where nearly 500 hectares have so far been destroyed.
Overnight, a 16-year-old was charged for starting a bushfire at Cranebrook, which damaged a house and destroyed a car and shed.