The fire, which broke out in the compressor shop of the high-security plant, led to the death of an employee identified as Padma Patnaik while he was being shifted to Vishakapatnam for treatment, official sources said.
At least six employees, including one engaged on contract, had been initially admitted to the HAL Hospital at Sunabeda with burn injuries after the mishap at the strategically important unit.
The injured persons with serious burns were later being shifted to a hospital in Vishakapatnam when Patnaik succumbed to injuries on the way, sources said.
The fire was extinguished in less then one hour before it could spread to other areas as fire tenders were pressed into service immediately, they said.
Efforts were on to ascertain the cause of the fire, they added.