Alberta appealed for help from other provinces and Ottawa to help fight the fire and airlift people from the city. Local authorities issued a mandatory evacuation order for all of Fort McMurray, which affects the city's 80,000 residents.
The 2,650-hectare (6,540-acre) fire, which was discovered on May 1, has closed off the main southern exit from the city, prompting residents to head north towards the oil sands camps.
"This is the biggest evacuation we have seen in the history of the province in terms of fire," Alberta Premier Rachel Notley said at a news conference.
"We need to find more camps, we have secured spaces for about 6,000 people, we know we need to find more and that work is underway."
Notley said there were no injuries or casualties in the fire, adding that oil sands operations were also unaffected.
A number of flights from Fort McMurray airport were cancelled and the airport advised passengers to check with their airlines for updates.
The blaze, which started southwest of Fort McMurray, spread rapidly on Tuesday to the outskirts of the city, forcing the evacuation of the downtown area and almost every community in the lower town on the banks of the Clearwater and Athabasca rivers.
"There's lots of smoke, its quite bad and hanging over the city. Where there are trees in the distance you can see the fire," Fort McMurray resident Nick Sanders told Reuters as he was packing up to leave downtown.
Earlier, TV footage and photographs on Twitter showed flames and smoke billowing over the city and traffic heading north on the highway to safety, while CTV News reported a trailer park had been destroyed.
"My thoughts are with people affected by the fire in Fort McMurray tonight. Stay safe and remember to follow evacuation orders," Canadian Prime Minister Justin Trudeau tweeted.
By late afternoon, the fire had blocked off one major route out of town, closing Highway 63 south of downtown.
Some residents were evacuated to Noralta Lodge, an oil sands camp 21 kilometres (13 miles) north of Fort McMurray.
"Tomorrow is expected to be a more intense burning day than today is," said Bruce Mayer, assistant deputy minister of Alberta's Forestry Division.
Mayer said that nine air tankers, more than a dozen helicopters and more than 100 firefighters were battling the fire.
Vehicles are seen on highway 63 as they are detoured near wildfire burning near Fort McMurray, Alberta May 1, 2016. An uncontrolled wildfire burning near Fort McMurray in northern Alberta, the heart of Canada's oil sands region, has forced the evacuation of nearly all the city's 80,000 residents, local authorities said on May 3, 2016.Courtesy Gregory Hong/Handout |
Earlier on Tuesday authorities said the wildfire jumped the Athabasca river and breached Highway 63, the main artery south from the isolated city, which is located around 430 km (267 miles) northeast of Alberta's capital, Edmonton.
Authorities are now expecting a cold front to reach Fort McMurray by Wednesday afternoon, bringing increased winds that will make tomorrow a more difficult fire-fighting day than today.
After a mild winter with lower-than-average snowfall and a warm spring, Alberta is much drier than normal for this time of year, raising the prospect of a long and expensive wildfire season.
Most oil sands facilities are to the north and east of the city, with the closest being Suncor Energy's base plant roughly 30 km (17 miles) away. A Suncor spokesman said there were no current impacts on operations.
Will Gibson, a spokesman for the Syncrude project, which has its facility around 40 km (25 miles) north of the city, said operations were unaffected.
This is the second major fire around the city in less than a year. Last May, wildfires in the area led to the evacuation of hundreds of workers from Canada's energy heartland, leading to a 9 percent cut in Alberta's oil sands output at the time.
The evacuations last year led to shutdowns by Cenovus Energy and Canadian Natural Resources Ltd at some of their projects.