Officials said the vessel was docked just outside the northwestern Russian city of Murmansk when the blaze broke out Thursday.
Russia's military said the blaze started on wooden scaffolding and then engulfed the sub's outer rubber-coated hull.
Firefighters managed to extinguish the blaze Friday afternoon, but seven members of the submarine crew were hospitalized after inhaling poisonous carbon monoxide.
Authorities are assuring there was no radiation leak, and that the vessel's nuclear-tipped missiles were not on board.
The cause of the fire was under investigation.
President Dmitry Medvedev summoned top Cabinet officials to report on the situation and demanded punishment for anyone found responsible.
Toxic fumes from the blaze had spread to the town of Roslyakovo where the shipyard is located, but officials said there was no need to evacuate local residents.
A 2008 accident at the Nerpa nuclear-powered submarine killed 20 Russian seamen and injured 21 others when its fire-extinguishing system activated in error and spewed suffocating Freon gas.
The Associated Press contributed to this report.