The fire broke out in the roof of the building in the city’s Territet neighbourhood on Thursday at around 9.20pm.
A woman and her child, living in an apartment on the first floor, were evacuated by emergency workers, the 24heures.ch website reported.
Police closed to traffic the road in front of the building for several hours.
The Palais l’Alcazar, a designated historic building,which has been carefully restored, is opposite the Territet train station.
Formerly Territet's Grand-Hôtel, it houses a baroque theatre and ballroom used by Austria’s Empress Elizabeth to entertain guests before she was murdered in Geneva by an Italian anarchist in 1898.
Police had no immediate explanation for the fire and no damage estimate was available.
The theatre can accommodate banquets of up to 300 people and receptions for 500.
In addition to the theatre, the building houses a museum for horse carriages.
A fire previously damaged the palace on January 29, 1984.
An investigation is continuing into the latest blaze.
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