Fire crews were called to L & M Spray in Gladstone Street at 10:20 BST.
Leicestershire Police closed the street alongside Crafton Street, Humberstone Road, Clyde Street, Wharf Street South and St Matthews Way due to smoke billowing across the city.
St Matthews Way has been reopened but two fire engines remain at the scene.
A Leicestershire Fire and Rescue spokesman said the cause of the fire is unknown at the moment.
He added an inspector has deemed the factory building "unsafe" and that it may have to be demolished.
Witnesses have told the BBC the road closures have caused chaos for buses and vehicles travelling around the city.
The BBC has attempted to contact L & M Spray but has not received a response.
A large fire at a spray paint factory has closed a number of roads in Leicester city centre.