The building previously housed part of the Debenhams department store, which closed in May 2021 following another fire the previous month.
River Island and Levi’s had shops on the ground floor of the building but both units have closed.
Prior to becoming a department store, it was part of the Palace Hotel, later becoming the Liberal Club, designed by architect John Lessels.
Former owners Legal and General had tabled plans for a £50m refurbishment which included a 207-room hotel, but that development never took place.
The site was later bought by Criterion Capital, the real estate firm by headed up by billionaire Asif Aziz.
He planned to turn it into a Zedwell hotel, which would be the first in Scotland if successful.
A spokesperson for Criterion Capital said it was “liaising with the emergency services and relevant authorities to support them as required.”
The firm submitted a planning application to clad the building in a false façade, including an advertising screen, in March.
A spokesperson for conservation body Edinburgh World Heritage said: “Fire represents one of the greatest threats to our historic buildings and cultural heritage.
“It is imperative to stabilise and retain as much fabric as possible of this listed building.
“No action should be taken until an urgent investigation has taken place to look into why the fire took place.”
