Emergency services were called to reports of a chemical explosion at an industrial building in Swann Drive, Derrimut about 9.45am.
At least 30 people were evacuated from the building as fire crews worked to bring a subsequent fire caused by the explosion under control.
A 44-year-old Hoppers Crossing man’s body was then found inside the factory.
A Fire Rescue Victoria spokesperson said the explosion was believed to have been caused by a chemical reaction.
About 30 emergency service vehicles, including HAZMAT teams and about 80 firefighters with breathing apparatus responded to the fire, which was contained by the factory’s sprinkler system, according to the spokesperson.
Ambulance Victoria earlier said they were treating multiple patients, including one person who appeared to be in a stable condition.
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Paramedics are also monitoring the about 28 people who were evacuated.
Derrimut is located 17km west of Melbourne’s CBD.
VicEmegency has issued an alert for nearby suburbs, including Derrimut, Laverton North, Sunshine West and Truganina advising smoke will be visible and some roads in the area might be closed.
Police said WorkSafe had been notified and a report would be prepared for the Coroner.
Detectives are investigating the fire and the cause has yet to be determined.