President Michelle Bachelet made her way to the small town of Futaleufu, the second town to be evacuated, as residents packed what belongings they could carry.
The town lies around 810 miles south of the capital Santiago and 100 miles southeast of the erupting Chaiten volcano, which is some distance from Chile's vital mining industry.
On Friday, Chaiten volcano erupted, forming a mushroom cloud as ash shot high into the sky. It continued to belch hot gas and ash on Monday, sending sooty emissions as far as neighboring Argentina.
Chilean authorities were caught off-guard by the eruption of a volcano long considered inactive. No lava flow has been detected, but experts have not ruled out the possibility of a more violent eruption.
"We are not sure what is going to happen with the volcano," Bachelet told reporters in the southern town of Puerto Montt, where many of the 4,200 people evacuated from the town of Chaiten are staying.
"We don't know if it will continue to spew ash, we don't know if lava will appear, and for that reason, we have taken precautionary measures, which is early evacuation," she added.
The National Emergency Office said a few of Futaleufu's 1,000 or so residents had crossed into neighboring Argentina, where some areas have also been showered with ash and where authorities last week closed schools and treated some for breathing problems.
Bachelet urged those in the affected area to protect their eyes and wear masks to avoid inhaling the ash.
The ash is in more than 6 inches thick in some places, coating houses, vehicles, trees and water supplies. It has also covered animal fodder.
Bachelet said around 25,000 head of cattle in the area were in serious danger of dying. The navy shipped in some fresh feed and planned to remove some animals on the return leg.
An elderly woman died from a heart attack as she was evacuated from Chaiten on Sunday, local media reported.
There is no record of the volcano erupting in the last 2,000 years, according to Sernageomin, a government mining and geology agency.
Luis Lara, a geologist at the agency who specializes in volcanoes, said the eruption was a reasonably major one and could get worse.
Worst case scenarios included a possible collapse of the volcano, which could trigger lava flows, or the explosion of the peak of its dome, he said.
Southern Chile is fragmented into hundreds of small islands and fjords. Some residents had never ventured from Chaiten until the 3,280-foot (1,000-meter) volcano six miles away forced them to go.
Chile has the world's second most active string of volcanoes behind Indonesia.credited to reuters and newsdaily