Police have declared an emergency situation in the central Queensland coastal city of Bundaberg as a tavern and backpackers' hostel went up in flames overnight.

Sixty people were evacuated uninjured from the hostel and another nearby motel, with firefighters containing the blaze by 4.45am after emergency services were first called about 11pm.

The Federal Backpackers Hostel and adjoining Spotted Dog Tavern on Bourbong Street in Bundaberg Central were the buildings involved in the fire.

Police have established an exclusion zone and closed Bourbong and Maryborough streets, Bourbong and Bingera streets, Burrum and Quay streets as well as Burrum and Woongarra streets.

Police said due to the significant damage caused by the fire, a number of road closures would remain in place throughout the day.