A local school was evacuated on Thursday as more than 80 firefighters battled the raging blaze.
Students and staff at the Lincoln Gardens Primary School were relocated "safe and well" to Kirton Point Primary School.
At one stage an emergency warning was issued for the fire which was burning uncontrolled in scorching conditions, fanned by strong winds.
Residents in Stamford Drive, Kathai Drive, Noontina Drive, Hassel Road and Pine Freezers Road were told it was too dangerous to leave.
But that message was later downgraded to a watch and act.
The Country Fire Service said 84 firefighters and 26 trucks were working on the fire supported by eight aircraft, including water bombers.
Police, ambulance crews, farm fire units and those from the National Parks and Wildlife Service were also at the scene.
CFS Chief Officer Brett Loughlin said it had been a very difficult day.
"At the moment the main forward spread of the fire is largely halted. It has burnt to the ocean in parts and into the industrial area," Mr Loughlin said.
"Crews are actively working on the flanks of the fire. That work will continue."
The CFS said it expected the blaze would run through several hundred hectares of scrub before being completely contained.
It had also burnt into the town's rubbish dump.
By 3pm, the mercury had reached 39.1C in Port Lincoln but a cooler change was moving in from the west, dropping the temperature to 31.1C by 4.50pm.
That change had also brought a wind shift.
The dangerous blaze came on the 40th anniversary of Ash Wednesday in South Australia when 28 people died and more than 350 homes were destroyed in major fires in the Adelaide Hills, the Clare Valley and the southeast.Â
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