Fire crews are battling a blaze at the former Old Mill Inn in Maryculter.
About 20 firefighters are at the scene on South Deeside Road after receiving a call at 3.22pm.
Four appliances and a height vehicle are currently in attendance.
A fire spokeswoman confirmed “good progress” had been made in extinguishing the blaze.
South Deeside Road has been closed by police in both directions to allow the firefighters’ space to extinguish the blaze.
Smoke could be seen billowing across the AWPR earlier.
Motorists are being urged to avoid the area while the incident is being dealt with.
A fire spokeswoman said: “We are making good progress.
“A water tower is being used, along with working at a safe height equipment.”
North Kincardine councillor Ian Mollison has had many fond memories of meals out at the former hotel.
He said: “It’s very sad to see what has happened to the hotel as I know lots of people have very happy memories of the place.
“It put on functions, weddings and meals and it is a great shame to see what has happened to it and I wonder what happens next with it.
“There used to be a nightclub called Champers which was an extension to the hotel and people from Aberdeen used to be bussed out there for nights out.
“It was a very famous local entertainment venue, I remember going to a wedding there.
“I liked to go out for meals there, it was always friendly with a nice atmosphere and had a lot of character.
“It’s so sad that it has fallen on hard times.
“It was flooded, then closed and it was badly vandalised over the last couple of years
“There is a really difficult decision for the owners, as the hotel trade is difficult in Aberdeenshire and Aberdeen.”