Firefighters battled a huge blaze in between London Bridge and Waterloo East stations, with local residents told to keep their windows closed.
The fire completely engulfed a railway arch containing vehicles in Union Street, Southwark, with around 70 firefighters fighting the flames.
At least two electric cars caught fire in the blaze, Network Rail confirmed.
Dramatic footage shared online shows black smoke pouring from the scene, with alarms going off in the background.
Trains stopped passing through London Bridge during the fire, however all lines were reopened after the flames were extinguished by 12.30pm.
Several buildings in the area were evacuated, with residents urged to shut their windows and doors due to heavy smoke.
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One Londoner said "acrid" smoke was spreading through Southwark, making the air "chewable".
A train passenger said the flames spread onto the tracks in front of her, with smoke entering the carriage.
The passenger, whose carriage stopped near the fire, tweeted: "Coming out of London Bridge and a fire spread onto the tracks.
"The smoke is now coming up the train and we have to be evacuated."
However, she later added: "The train had finally reversed back down to London Bridge to let us off! There will be any trains going past London Bridge!!! All trains to Charing Cross and Waterloo cancelled."
London Fire Brigade said the blaze broke out at about 9.29am this morning.
A spokesman said: "Ten fire engines and around 70 firefighters are tackling a fire under the railway arches on Union Street in Southwark."
Station Commander Wayne Johnson, who is at the scene, said: "The blaze is producing heavy smoke and those living or working in the local area are advised to keep their windows and doors closed.
"Trains to and from London Bridge are affected and several buildings have been evacuated."
The brigade's control room received more than 33 calls about the blaze.
Fire chiefs urged Londoners to avoid the scene and keep their windows and doors closed.
Crews from Dowgate, Whitechapel, Shoreditch, Shadwell and surrounding fire stations were sent to the scene.
In an update shared at around 11.30am, London Fire Brigade said the blaze was under control.
The brigade added: "The fire under the railway arches in #Southwark is now under control but crews will remain on scene.
"There are currently no reports of any injuries. Our fire investigators will now begin their investigation into the cause of the blaze."
Network Rail Kent and Sussex said the fire had spread to a car park, setting a couple of electric cars on fire.
The cause of the blaze is not known at this time.
A woman has told how she was evacuated from her workplace as a result of “thick, black smoke pouring out” of the railway arch.
Hanushe Lala, 24, from Streatham in south London, said: “I was in a meeting at around 9.44am, when the alarms started going off and everyone was looking around to find out if it was real.
"Then we all got told to leave the building.
“All the buildings around us have been evacuated… around half an hour ago the place was swarming with people but now everyone is starting to move away because they’ve told us we won’t be let back in for a while because the fire is so bad and getting worse.”
Another witness, Lee Scarratt, 36, said: “I suddenly saw very thick grey/black smoke billowing out over the tops of the buildings across the street from my office building.
“I could hear fire alarms going off and a crowd of people crowding at the end of the road. Then four fire engines arrived and an incident truck. The smoke continued to get thicker and could be really visual in the sky.”
Lauren Chopin, who lives in an apartment near the fire, said she had to wear a mask in her apartment due to the fumes.
This morning, Southeastern tweeted: "Due to a fire next to the track between #WaterlooEast and London Bridge, services across all routes through London Bridge are severely disrupted.
"Trains are being diverted to other London Terminals or terminated at alternative locations."
Southeastern later added that all lines had reopened between Waterloo East and London Bridge.
A spokesman said: "The emergency services and Network Rail response staff have advised that the fire is extinguished and all lines have reopened.
"We will now work to get the service back to normal so trains will continue to be altered or cancelled whilst we do."
British Transport Police confirmed both London Bridge and Southwark stations had closed due to smoke.
BTP tweeted: "We’re on scene assisting @LondonFire as they respond to a significant fire under the railway arches in #Southwark.
"Southwark station is closed and a cordon is in place on America Street and Great Suffolk Street.
"#LondonBridge station has also been closed due to smoke. Please check before you travel."
Smoke could be seen rising from the scene for miles around.
Sharing a video of smoke rising from the scene, one Twitter user said: "Fire at waterloo east #London #ClimateEmergency."
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Another wrote: "Start of a big fire on union street near London Bridge."
A third added: "Not good at all. Big fire on Union Street, Southwark as viewed from Bloomberg office (north of the river)."
A fourth Twitter user said: "Acrid smoke is filling the air over southwark due to the fire on union street, was just up on the roof taking these shots and the air is chewable. Stay in, keep the windows closed."
The Metropolitan Police confirmed officers were called at 9.44am to deal with traffic control.
