Chile and Argentina have ordered the evacuation of 3,000 people living near the Copahue volcano, which straddles the border between them.

The volcano has seen increasing seismic activity in recent weeks but has not erupted.

It is located between Argentina's Neuquen province and Chile's Bio Bio region, and is about 500km south of the Chilean capital Santiago.

Chilean Interior Minister Andres Chadwick told a nationally televised news conference that the volcano will not necessarily start erupting.

"But according to the Sernageomin (National Geological and Mining Service), the volcano is now in a process that could culminate in an eruption, for that reason we've issued a red alert and the evacuation," he said.

In Argentina's Neuquen province, authorities also declared a "red alert," and ordered the evacuation of about 900 people in tourist-haven Caviahue-Copahue.

The Argentine municipality had previously ordered the cancellation of school classes.

Close to the Chilean side of the volcano, in Bio Bio region, power generator Endesa Chile operates the Ralco and Pangue hydroelectric dams, which have not been affected by the evacuation order.

Endesa Chile is monitoring the situation, a company source told Reuters.

Water levels at the dams are at technical lows, which would avoid the possible need to open the floodgates, and the walls of the dams are designed to withstand earthquakes, the source said.

In mid-2011, ash from a volcano in Chile's Puyehue-Cordon Caulle chain that erupted after decades of lying dormant forced the sporadic cancellation of hundreds of flights, especially in neighbouring Argentina and Uruguay.