The Tasmania Fire Service early on Wednesday issued a warning that the Coles Bay Road area at Friendly Beaches was "expected to be impacted immediately".
"The fire danger rating is High. Fires under these conditions are expected to be uncontrolled and fast moving," the warning said.
"If you do not have a safe route to a safer place, shelter inside the nearest building, regularly checking your surroundings and putting out any fires near the building until the fire passes."
The fire service warned burning embers may threaten homes before the main fire arrived, and smoke and ash may make it difficult to see and breathe.
Authorities first issued an emergency warning about 3pm on Tuesday for people to leave the area if safe to do so.
That warning was upgraded to a seek shelter message shortly before 8pm.
Ground and aircraft crews have been fighting the blaze.
Tasmania Fire Service acting regional chief Greg Butters on Tuesday said the town of Coles Bay itself was not under immediate threat but vigilance should be maintained.
"Anyone in the Friendly Beaches area who has not evacuated should leave immediately to a nearby safer place," he said in a statement on Tuesday evening.
The fire was about 20km north of the entrance to the picturesque Freycinet National Park.
Swanwick and Coles Bay remained under a "watch and act" alert, with people told to avoid the area.
Guests and staff at nearby Freycinet Resort have evacuated, while people gathered at the designated Coles Bay boat ramp "safe place".
Police closed Coles Bay Rd from the Tasman Highway to Swanwick Rd.
An evacuation centre has been set up at Swansea Town Hall for people who cannot return home via Coles Bay Rd.
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