The CFA has issued an advice message for people near to the fire in Toolleen.
People in the area, including in Cornella, Cornella East and Myola, may see smoke this morning and over the next two days.
The fire is not likely to spread but will generate a lot of smoke, the message advises.
Firefighters brought the fire under control this morning and remain at the scene making sure it does not light back up.
ROUGHLY 50 large bales of hay have been damaged in a haystack fire overnight.
Five Country Fire Authority crews were called to a Toolleen property at 3.48am after the fire erupted.
The fire burnt an area roughly 12 by 30 metres wide at a property near the intersection of Myola Road and Tavlstock Road.
Firefighters brought the fire under control by 4.28am and two crews remain on scene monitoring the situation.
Haystack fires can smolder for long periods of time and crews often expect to be on scene for several days to make sure it does they do not reignite and burn out of control.
The CFA went to a record number of haystack fires during the 2018/19 bushfire season, chief officer Steve Warrington said in September.
"Over the previous fire season CFA crews responded to close to 90 haystack fires - more than any season before," he said.
"Haystack fires can start quite easily from lightning, equipment and machinery, but another major source is spontaneous combustion."
Spontaneous combustion can occur when hay is either not properly cured before baling, or not stored to protect it from rain or damp conditions, which means moisture content in the bales is higher than the recommended level.
They are then stored in environments with high temperatures and little airflow which triggers a chemical reaction that leads to fire.
It is not yet clear what caused the fire in Toolleen last night.