Forty families in Caldas province will be evacuated first, he said, and 500 additional families may eventually be asked to do the same.
The Nevado del Ruiz is a stratovolcano, or composite volcano, which straddles the border between Colombia's Tolima and Caldas provinces.
Authorities are monitoring areas around rivers and those which could be prone to landslides in the case of an eruption, he said, and are shoring up roads that would be used for evacuations.
Plans are also being made for evacuee shelters and for the transport of livestock and pets, Velasco added.
Caldas governor Luis Carlos Velasquez has asked the national government for 800 million pesos (about $173,800) to strengthen an early warning system, 400 million pesos for machinery, and funding for evacuees' housing, the government said in a statement on Monday.