The scene of the accident is adjacent to China Civil Engineering Construction Corporation (CCECC) construction yard along Badagry expressway.
Firefighters were quickly summoned to the scene and they have been battling to contain the blaze.
Director-General of the Lagos State Emergency Management Agency (LASEMA) Olufemi Osanyintolu told Channels Television that preliminary investigations indicated that the accident occurred after the rear spring of the tanker broke while the vehicle was travelling at high speed.
No casualties have been recorded, and law enforcement officials are working to ease the traffic that has built up around the area as a result of the incident.