Paroo Mayor Lindsay Godfrey says a shed fire yesterday at Cunnamulla in south-west Queensland will set back local roadworks operations for the next 12 months.

Workers noticed flames in the works department shed on Broad Street around midday (AEST) and evacuated the building.

Councillor Godfrey says the flames spread quickly and had soon engulfed the entire shed.

He says they are still unsure how the fire started, but no-one was injured in the blaze.

Councillor Godfrey says the shed was the main hub for the council's extensive roadworks operation.

He says the fire destroyed the works department shed and around $5 million worth of equipment.

"We've lost a lot of equipment - we've lost a state-of-the-art facility that's not very old," he said.

"We'll be going back to a very makeshift operation.

"It'll be at least 12 months or more until we get ourselves back going anywhere like where we were before, so there's going to be considerable inconvenience."

He says the council will be looking at its options.

"We do have some alternative premises that are available to us to move," he said.

"We'll be looking to have our operation running again by January 14, so we can continue with the flood relief programs that we're currently working on."