Emergency services were called to a mechanical warehouse on Bunnett Street in Sunshine North just after 4am.
Fire Rescue Victoria (FRV) Deputy Commissioner Michelle Cowling said the fire had engulfed a warehouse before spreading to a second factory.
She confirmed the two people killed were in the second factory and had not yet been identified.
Cowling said the fire was being treated as “suspicious” and said FRV would work with the Victoria Police arson squad to determine the cause of the fire.
Crews contained the fire within three hours.
“At the height of the fire, we had approximately 50 firefighters,” Cowling said.
“We had two aerial units to extinguish from above along with ground units.
“We are still finding significant hotspots due to the level of stuff that’s (inside) these two factories.
“Firefighting operations have not ceased and will continue throughout today and maybe into the night.”