An ash cloud from the Calbuco volcano in southern Chile that erupted unexpectedly on Wednesday was blowing into Chile and Argentina on Thursday, forcing the cancellation of flights from nearby cities in both countries and blanketing residents in ash.

The volcano, which last had a major eruption in 1961, has belched a spectacular plume of ash and smoke around 15 kilometres into the sky near the popular tourist town of Puerto Varas, some 1,000 kilometres south of Santiago.

Winds have already carried part of the ash cloud to the city of Chillan, some 400 kilometres south of Santiago, and could reach the capital by the end of the day, said government meteorologist Arnoldo Zuniga.

Most of the ash, however, was headed over the Andes mountains into neighbouring Argentina.

"We don't rule out that the cloud could reach part of Buenos Aires over the next 48 to 72 hours," said Zuniga.

Volcanic ash can damage aircraft and makes flying dangerous. In 2011, the eruption of Chile's Puyehue volcano sent ash high into the atmosphere, leading to flight cancellations as far away as Australia.

A day after the Calbuco eruption, the cleanup began, but residents of Ensenada, above, and other towns were still on alert as ash continued to be blown across the region. (Ivan Alvarado/Reuters) International travel was unaffected as of Thursday afternoon, but LATAM Airlines Group SA's Chilean arm, LAN, has cancelled more than 20 domestic flights to and from the affected region since Wednesday. Local carrier SKY Airline has also cancelled flights to and from the city of Puerto Montt.

In Argentina, Bariloche and Neuquen airports were shut. Flights by LAN Argentina, state-owned Aerolineas Argentinas and Lade, owned by the Argentine Air Force, were affected.

Calbuco erupted twice over the last 24 hours and has now paused, but it remains unstable and could erupt again, experts said.

The Calbuco volcano is about 1,000 km south of the Chilean capital, Santiago, and near the tourist towns of Puerto Varas and Puerto Montt. (The Canadian Press) More than 4,000 people have been evacuated from the immediate area, authorities said, with the emergency services focusing on the small town of Ensenada, about 15 kilometres from the volcano. TV pictures showed a thick layer of grey ash coating nearby towns.

"We woke up today with a blanket of fog and it hasn't cleared. We have a layer of smoke above us," said Daniel Palma, 30, a psychologist who lives in Puerto Varas, told The Associated Press.

A vehicle travels along a road at Pucon city in southern Chile. Ash was blown as far as neighbouring Argentina and forced cancellations of flights in both countries. (Cristobal Saavedra/Reuters) No one has been reported killed, and a climber who was close to the summit when the eruption occurred and reported missing, has been found alive and in good health.

The Associated Press reported that President Michelle Bachelet declared a state of emergency, saying the eruption of Calbuco is "more serious and unpredictable" than the one last month at the Villarica volcano, which also forced the evacuation of thousands.

Some residents are concerned the large amount of ash, combined with the smoke and fog hanging over the region, could cause health problems. (Ivan Alvarado/Reuters) "We don't have any problems with supplies, water or sewage up to now. That's not the problem," said Bachelet, who visited the area on Thursday. "Our problem is a respiratory one, from inhaling all of this ash, and the fact that this ash could generate some sort of environmental contamination."

The Chilean national geology and mining service warned that residents should prepare for an imminent third, and "even more aggressive eruption," the AP reported.