Vessels close to the stricken "Norman Atlantic", located 33 nautical miles off the small Greek island of Othonoi, were rushing to give assistance after picking up its distress signal, the Greek coast guard said.
Around 55 passengers have been transferred to one ship, while 150 others were in a life boat.
The fire was said to have broken out in the ferry's parking bay, holding some 200 vehicles.
Greek Defence Minister Nikos Dendias told the channel that Italian authorities had responded to Greece's plea for assistance and had now taken charge of the rescue operation.
The "Norman Atlantic" had left the Greek port of Patras at 0330 GMT and was heading to the Italian port of Ancona when the fire took hold.
The evacuation of the ferry was occurring in difficult conditions, with passengers saying gale-force winds were lashing the vessel.