Thousands of people were forced to leave their homes as the Puyehue-Cordon Caulle volcano sent a high plume of ash across South America on Tuesday.
The flights were also delayed in South Argentina which witnessed a thick layer of dust covering the snow everywhere.
Booming explosions were also heard across the Andes as toxic gases erupted from the volcano, reports said. Winds blew a six-mile high cloud of ash all the way to the Atlantic Ocean.
Authorities in Chile went house-to-house to evacuate people who are living near the volcano because of an increasing danger of toxic gas and flash floods.
Ash clouds fanned by the winds blew over neighboring Argentina, darkening the sky and resulting in the closure of the nearby airport. The volcano eruption also prompted authorities to close a border crossing into Argentina.
It was not clear which of the chain's four volcanoes had erupted because of ash cover and weather conditions, a report in Daily Mail says. The chain last saw a major eruption in 1960.
Local media said the smell of sulphur hung in the air and there was constant seismic activity.
The Cordon Caulle (volcanic range) has entered an eruptive process, with an explosion resulting in a 10-kilometer-high gas column, the state emergency office ONEMI said.
The government said it has evacuated 3,500 people from the surrounding area.