Vanuatu's Government has declared a state of emergency after an erupting volcano forced at least 6,000 people to flee their homes on the island of Ambae.

The Manaro volcano has been active since 2005, but a recent increase in activity has raised fears of a major eruption.

The national government also approved a $2 million fund to provide food, shelter and water to those affected.

The volcano's activity measure was raised to level four for the first time over the weekend, which indicates a "moderate eruption" and is the second highest level in Vanuatu's volcanic alert system.

"There's ash, fire, stones and lava being thrown out from the mouth of the volcano," Shadrack Welegtabit, the director of Vanuatu's National Disaster Management Office, said.

"There's a lot of activity going on."

He said it was difficult to say whether there will be a major eruption, and that those who have been evacuated will just have to sit and wait.

"With the seismic machine, we can measure what's happening but we can't really predict what the volcano will do next," he said.

Smoke was seen coming out of the volcano on Ambae island earlier this week. ( Facebook: Vanuatu Red Cross, file )

About 10,000 people live on the island, and those in the north and south are most vulnerable.

The Vanuatu Red Cross said those villagers have been moved to the eastern and western sides of the island.

"The priority now is shelter, water and food, and also looking at health," Augustine Garae, the organisation's disaster management coordinator, said.

Evacuees struggling to get information

Georgia Tacey, the Vanuatu country director for non-governmental organisation Save the Children, said those affected are struggling without reliable information about the eruption.

Emergency supplies are gathered in Vanuatu amid evacuations. ( Facebook: National Disaster Management Office )

"They're incredibly distressed, there isn't a great deal of mobile cell coverage over the island so [they] rely on word of mouth. Radio coverage is also very little," she said.

"People don't know if it's going to last for a week or if it's going to last for five months, and I think the major concern is when can they go back home."

Vanuatu's Meteorology and Geohazards Department said in an alert that villagers within 6.5 kilometres of the volcano face the biggest risk from airborne rocks and volcanic gas.

The department warned that acid rain could damage crops across a broader area.

Ms Tacey said authorities have a contingency plan in place for if the volcanic activity increases.

"They would be looking at evacuating the entire island to nearby islands," she said.

"Obviously no one wants that to happen because apart from that being incredibly distressing it would be logistically challenging and would displace people for a very long time."

An aerial shot showing the activity of Manaro volcano. ( Facebook: National Disaster Management Office )

Vanuatu is considered one of the countries most prone to natural disasters, with a half-dozen active volcanoes as well as regular cyclones and earthquakes.

It sits on the Pacific's Ring of Fire, the arc of seismic faults around the Pacific Ocean where earthquakes and volcanoes are common.

ABC/Wires