Emergency services rushed to the Bruce Highway in Bajool, near Rockhampton, when seven vehicles, including a semi-trailer carrying the military tank, were involved in a crash just before 11.30am.
The serious crash also involved a B-double truck, a flat-bed truck carrying two caravans, three cars, and a four-wheel-drive towing another caravan.
When police arrived at the scene, three vehicles had caught fire and the other four were extensively damaged.
Six people were transported to the Rockhampton and Gladstone Hospitals, three with suspected spinal injuries.
A fire spread to nearby grassland following the crash but was soon brought under control.
It is believed a US tank was onboard one of the semi-trailers.
The US Army is currently visiting the area for the Talisman Sabre war games that will take place this weekend.
The road is a major route for grey nomads and caravanning is a big tourism industry in central and northern parts of the state.
Witness Naomi Wells told 9News she was behind the tanker when it crashed.
“All of a sudden there was a massive explosion of fire, I called triple zero immediately,” Wells said.
“What we could see though was there was a caravan and a truck seemed to be parked on a road.
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“As I was talking to the emergency people there were at least four or five explosions that had been going off and they thought at the time it might have been the gas bottles in the caravan.
“After about the third or fourth, the popping became continuous and quite loud.
“Even the service personnel I was talking to actually said, ‘Oh my gosh, I can hear that’, like, ‘Move back’, so they were getting quite loud and consistent.”
John Pappas from Queensland Fire and Emergency Services said a multi-agency response was required at the scene.
“It’s been quite a significant incident today, closing the highway with the fire spreading to surrounding grassland areas,” he said.
“We’ve had crews from Fire and Rescue and Rural Fire Service working this afternoon alongside Queensland Police Service and Queensland Ambulance Service in order to combat this incident.”
An earlier emergency declaration made by police establishing an exclusion zone encompassing the Bruce Highway, McLean Road and Bobs Creek Road at Bajool has since been revoked, however the Bruce Highway is expected to stay closed for some time.
Members of the public are urged to avoid the area or expect lengthy delays.
Police say the investigation into the crash is ongoing.
Witnesses or anyone with relevant vision is urged to contact police.