The fire, on the Killylea Road, started in a building complex on Sunday morning.
It affected Cordelia’s fish and chip shop, which is part of a bigger business complex on the Killylea Road.
The complex also consists of an off licence, tanning salon and Chinese takeaway, as well as flats.
Eyewitnesses described plumes of smoke rising from the property.
Photographs showed severe scorch damage, while the roof had partially caved in.
The cause of the fire is understood to be accidental.
Both the chip shop and flats above it were badly damaged, the fire service said.
The tanning studio, the off-licence and Chinese takeaway also suffered “significant water damage”.
Milana Petruseviciute, who was working in the tanning salon next door to Cordelia’s, said initially she thought the salon’s sunbeds were on fire.
“I checked and everything was grand and then I looked up and there was smoke coming in through the ceiling,” she told the BBC.
“I looked outside and everywhere was full of smoke. It was mental.”
People in the flats were evacuated to safety.
One said: “I was asleep and my dad woke me up. I got my brother and we all came down outside.”
Workers from the Housing Executive were at the scene, sorting emergency accommodation for affected families, while police directed traffic away from the blaze.
People watched from the street as firefighters continued to battle to save what is left of four of Armagh city’s most popular businesses.
A police spokesperson said: “Due to a fire at the Killylea Road area of Armagh this afternoon, Sunday July 21, motorists are advised to avoid the area.
“Colleagues from Northern Ireland Fire & Rescue Service are in attendance and motorists should seek alternative routes.”
