The fire broke out at the former Laser 20 building in Upper Lichfield Street shortly before 6pm on Sunday.
West Midlands Fire Service said the blaze involved two buildings near The Workers Rest pub and Morrisons supermarket.
The service said the fire completely - now believed to have been started deliberately - destroyed a single-storey building at the rear of the site, which included the roof collapsing. Meanwhile the two-storey building that faces the street was unaffected by the flames, but suffered 100 per cent smoke damage.
Photos and video posted on social media show flames and smoke pouring out of the building.
A total of 60 people were evacuated from a nearby pub, along with 10 adults and three children from neighbouring homes.
The service later tweeted: "Fire investigation have been in attendance and completing investigations into cause of fire. Other agencies have been in attendance and also police."
Ten fire crews were called to the scene, with two aerial ladders also in use.
Speaking at 10pm, a spokesperson for the fire service said the operation was starting to wind down, but relief crews were being sent.
Eyewitnesses have also described what they saw.
Jonathan Smith, who lives nearby, said he was first made aware of the blaze when a number of fire engines screamed past his home, but he didn't think much of it at first.
"It was not until I started to smell burning wire that I realised there was a fire close by. Going into the bedroom I could see the sky was red and full of smoke over the town centre, close to Morrisons," he said.
"I went out to see a number of engines and police vehicles lined up outside Morrisons and directly opposite the former Chamberlain Working Mens Club which was now brightly ablaze. I counted 1appliancesss at the scene.
"There was a large crowd gathering on Morrisons car park with what I took to managerial staff from the superstore assisting with fire crews in establishing where water hydrant points were on the car park as, from what I could hear, the lights on the car park had been turned off as the store was closed, making it hard for the crews to find them."
Susan Bennett, a barmaid at The Workers Rest, said her daughter, Toni Lloyd, called the fire service.
"My daughter came in and told us the building was on fire, so we all got out," she said.
"There was smoke coming out from the top and she was asked to take a picture of the fire to send to them. There was smoke everywhere.
"We were evacuated to the car park, there were more than 60 people in, we had a singer on.
That was it for the night. You could feel the heat from the back of the pub, the flames were massive."
It's not the first time the building has been hit by fire this year.
On May 30 crews were called at 1.55am after receiving reports for a fire.
The site has been empty since 2016 when Laser 20 shut down amid allegations of child grooming.