Around 80 firefighters were tackling the fire, which started at La Perla restaurant in Burlees House shortly after 2am this morning.
West Yorkshire Fire and Rescue said that 12 people have been evacuated from the surrounding area and that buildings either side of the restaurant have managed to be saved.
The town hall has opened its doors to all those affected by the incident and welfare units have been set up. Calderdale Council has also asked people to avoid the town centre. In a tweet, the council said: “Please avoid Hebden Bridge town centre area until further notice, there are several road closures due to a major fire. We have officers and wardens in the area.”
Calder Valley MP Craig Whittaker reacted to the news, saying: “Sad to see this iconic mill go up in flames during the night. Thankfully there are no known casualties. The town centre is currently closed off and people living in the town centre of Hebden Bridge are advised to keep windows and doors closed.”