Tasmania Fire Service was alerted to the fire about 4.30am on Wednesday, with crews from Rocherlea and Lilydale attending the scene. 

Three trucks and 12 personnel, which included a number of volunteer firefighters from Rocherlea, attended the Brown Mountain Road property.

Tasmania Fire Service Launceston station officer Danny Guy said they found one of the chicken sheds fully involved, so all their efforts went into saving the shed beside it.

The shed that was engulfed was destroyed by the blaze, causing about $1 million damage. 

Mr Guy said the Olson family was devastated by the fire at their Karoola property.

"They’re devastated, it’s their livelihood. They employ four people apart from the couple themselves so there are six people here all up," he said. 

Firefighters had a difficult day of cleaning up as the chicken shed was raised, with a thick layer of chicken manure underneath.

"There’s a fair bit of iron and stuff in there and because of the way it is setup, with all the chook droppings falling through the floor, there is no solid floor underneath the shed," Mr Guy said.

"It will be difficult because it is obviously not very solid underfoot and we will probably have to get machinery to come in and slowly pull it apart."

The chicken manure could smoulder for a number of days, Mr Guy said. 

An excavator was used to remove some of the shed's iron to allow investigators deeper access. 

The destroyed shed was built in 1980 and was one of many sheds on the property that housed the farm's barn-laying chickens.

The business has been operating since 1889. 

Olson’s Eggs were given the green light to expand its operations in October 2017 after saying demand was outstripping supply.

The development application for a second chicken shed at a Quills Road property, which is about a 10-minute drive from the Brown Mountain Road.

The application received 15 representations, with Lalla community members expressing concerns about odour, carcass disposal, noise and runoff.