Beechworth incident controller, Leith McKenzie, said the fire, which was first reported yesterday afternoon, was driven by strong winds and extreme fire conditions.

Mr McKenzie paid tribute to the firefighters who worked through the night to help save hundreds of houses in the fire's path, as it spread rapidly across the landscape.

"It's fair to say that it has been a hell of a day and night for all of us," he said.

"We gave it our best shot, and I am extremely proud of the efforts of our firefighters.

"Together with the community, we have done our very best to limit the spread and impact of this fire."

Fuelled by strong north-westerly winds and searing heat, the fire quickly spread, spotting up to 10km ahead of the main fire front.

"The fire spread faster than any of us could have imagined," Mr McKenzie said.

"At one stage it was a series of spot-fires ahead of the main fire, which all joined to create a massive fire front."

Daylight was expected to shed light on reports of unconfirmed structural losses.

Mr McKenzie said while conditions on the fire ground abated in the early hours of the morning, worsening conditions today would once again put towns under threat.

"While the weather conditions will not be as extreme as yesterday, we still have a largely uncontained fire which will require significant resources to bring it under control," he said.

"We will have fresh crews on the line this morning and once again will be doing everything possible to limit its spread and impact on the community."