Showing ash and gas spewing out around 5 km into the air, the video of the San Cristobal volcano also shows the area being inundated with ash and volcanic dust.
Digital Journal reported on Saturday that the San Cristobal volcano, located just outside the city of Chichigalpa, about 154 km north of the capital, Managua, had started spewing gas and ash into the air.
On Saturday, three powerful explosions emitting from the volcano were heard by residents in nearby villages.
A video has since been released showing the 1,745-meter volcano in action, as some 3,000 people from areas surrounding the volcano are evacuated. Theories are that eventually up to 20,000 people may be affected.
Guillermo Gonzalez, executive director of the Nicaraguan government's disaster agency told media, "This activity could affect some 500 families totaling 3,000 people, so we decided to evacuate them."
"We do not rule out anything, but call for calm," he said.
The Geological Institute in Nicaragua confirmed that it had detected "strong activity" coming from the epicenter of the volcano.
The plume has formed a cloud extending 48 kms from the volcano. The Nicaraguan Institute of Territorial Studies (INETER) has recommended that the air space around San Cristobal be closed, due to the size of the plume.
Ineter has also warned that "more gas emissions and sporadic explosions" could be expected.
San Cristobal is one of the most active volcanoes along Nicaragua’s Pacific coast. The volcano last erupted in 2004, but did stir in mid-2008, when it expelled gas and rumbled with a series of small eruptions.
The country has been on alert since a strong earthquake shook neighboring Costa Rica on Wednesday. This was followed by a swarm of some 17 minor tremors in the area around Lake Managua the following day.