The fire broke out on the top floor of the old cotton mill in the Fritton Hill area just after 4am on Thursday.
It was already “well-developed” when the first band of 80 firefighters arrived, said Greater Manchester Fire and Rescue Service Area Commander Warren Pickstone.
Residents were sent to a local rest centre or to the homes of friends.
Those people allowed to stay and passing motorists were warned to keep windows and doors closed as the smoke spread.
Firefighters took around seven hours to get the flames under control, having to withdraw at one point after part of the building collapsed and the heat became too intense.
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Mr Pickstone said firefighters managed to save a substation inside the courtyard of the building which, if it had been destroyed, would have cut power to 2,500 properties.
Gas, propane and oxygen cylinders at the site were covered with water to stop them exploding, he added.
By early Thursday evening, firefighters were still at the fire and were working with building control officers and demolition contractors to assess the safety of the building.
Area Manager Tony Hunter, who was in charge of the firefighting effort during the evening, said: “Our number one priority at the moment is to get local residents who have been evacuated back into their homes.
“There is still a mass of smoke across the area which is being monitored, we are advising everyone to stay indoors with their windows and doors closed.
“There is a small chance that people may have been sleeping inside this building when the fire started, but the fire has been too intense for crew to search the property safely.
“Once the remains of the building have been made safe, we will be in the position to investigate further.”
The cause of the fire is not clear but the building was also damaged by fire in September and more than four years ago when arsonists torched wagons containing kitchen furniture.