Market Street, where the Bronte sisters were born before moving to Haworth, is just metres away.
The workshop, used for old scrap vehicles, is fully ablaze, according to West Yorkshire Fire and Rescue Service.
People in the area are asked to keep doors and windows closed as a precautionary measure.
Sara Cahill said on Facebook: “It was very scary. We were walking past from school and saw the flames. We rushed past and then there was a massive boom.”