Nine fire engines are battling to save the building which formerly housed the Comrades Club on Adelaide Street.
The building has a long history and is said to be an important part of Blackpool's heritage.
Blackpool Grammar School was based on the site from 1893 after and was run by Thomas Sankey who bought the house which was then called Frogmore.
Although the building was perhaps best known as home of the Comrades Club which was set up in 1920 by ex-servicemen returning from the First World War.
The club provided a social meeting point for ex-servicemen for over 90 years and was so popular in the 1980s and 90s there was a waiting list to join up.
The majority of the membership was made up of relatives of Second World War veterans who joined the club upon returning from active service in the 1940s.
Most of the grandfathers and fathers who gave memberships to their sons and grandsons have now died, but the club’s legacy lived on through their relatives.
But dwindling numbers and years of financial losses forced the club to close its doors in 2014.
Chairman of the Tim Pipe said at the time of the club's closure that the venue was losing Â£40,000 a year and was struggling to turn a profit after the triple blow of the smoking ban, an ageing membership and dwindling takings.Mr Pipe said: “There is just no money. From my findings the club had been taking on debt for the last 10 years.
“It is part of Blackpool’s heritage. It is something which belongs to Blackpool.”