UPDATE 6,10pm: The fire has spread to the store building itself and the roof is thought to have collapsed. Emergency services are now warning that the smoke could be toxic.
The storage area behind the B&M Bargains store is alight and smoke is drifting across a wide area.
A cordon has been set up and residents living nearby have been advised to remain indoors.
Is it not known whether anybody has been injured.
The A1237 between Wigginton and Clifton Moor is closed and Stirling Road and Audax Road are also shut.
A North Yorkshire Police inspector described the fire as a 'major incident' on a Twitter post.
North Yorkshire Police said:
"Police are currently at the scene of a fire in the storage yard of the B&M store on Clifton Moor, York.
"The area around the store has been evacuated and the A1237 ring road between Wigginton roundabout and the Tesco roundabout is currently closed to allow emergency services to attend the scene.
"Smoke is drifting across the A1237 road and causing hazardous conditions. Motorists are advised to avoid the area.
"Residents in the area are advised to stay indoors and close all windows while emergency services deal with the fire."