Devon and Cornwall Police say they are treating the fire at Seaton Heights on Monday night as 'arson'.
Officers were called at 4.50pm by the fire service who were tackling the fire at the former hotel on Harepath Hill.
The building sustained serious damage, but no injuries were reported.
The A3052 was closed in both directions for several hours between Harepath Hill and Seaton Down Hill.
The fire was finally extinguished by crews at around 12:30pm yesterday (October 24) after burning for more than 20 hours.
Police are treating the incident as arson and appealing to anyone who saw or heard anything suspicious in the area at the time to contact them online or by telephone on 101, quoting crime reference 50230282022.
At its height, 13 appliances from Devon, Somerset and Wiltshire were called to the scene.
The fire was then left to burn out itself and was stopped from spreading further by the installation of a 'fire wall'.
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here