Mayor Phyllis Miller OAM has expressed the community's deep sadness after fire gutted the Forbes Inn in the early hours of Sunday morning - but has also shared confidence in the future of the venue.

“It is the loss of such an iconic and much loved venue in Forbes," Mayor Miller said.

“We are grateful for the swift and professional actions of NSW Police, Fire and Rescue NSW and Rural Fire Service crews from around Forbes.

"The prompt response prevented what could have been a far more serious tragedy.

"A special thanks also to the Fire and Rescue teams who travelled from nearby towns to assist in the 10-hour operation."

Some 40 firefighters, both local and from neighbouring towns, battled the blaze after emergency services were called about 1.30am on Sunday and found the top level of the two-storey venue alight.

NSW Police said the building was evacuated, with no injuries reported at time of preparing for press.

Forbes' NSW Fire and Rescue team worked alongside Rural Fire Service volunteers and Fire and Rescue colleagues from Parkes, Peak Hill, Cowra, Young, Harden and Condobolin to contain and control the fire.

Unable to enter the building due to what was described as significant structural instability and a collapsed roof, firefighters fought the blaze from outside while a drone equipped with thermal imaging technology was also deployed to help identify hot spots and monitor the fire’s progression.

NSW Ambulance attended the scene to assess and support the welfare of individuals evacuated from the building, as well as to monitor the health and safety of firefighters and other emergency personnel.

Mayor Miller described the Inn as a much-loved community venue - serving more than 4000 meals a week.

"They had 66 full time and casual employees – as well as many local suppliers and contractors," she said.

"The Forbes Inn is one of our community’s largest sponsors and supports more than 10 teams and community groups, including senior league, union and netball," Mayor Miller added.

The Hodge family are devastated by the fire and have expressed their commitment to rebuilding the hotel – bigger and better than ever.

“They had invested millions after the Forbes flood and refurbished the Inn to metropolitan standard in the central west,” Mayor Miller said.

“Forbes has a long history of resilience and together we will support the Hodge family and the staff of the Forbes Inn as we begin to recover from this loss."

An investigation is underway into the circumstances surrounding the blaze.