STORY: Drone footage captured by a local showed the smouldering giant spewing gas from its snow-covered peak and a small pool of lava in its inside.
The geology agency's South Andes Volcanic Observatory has said small explosions of rocks and high temperatures around the crater are expected.
Authorities raised a yellow alert on neighboring regions and declared a 500-meter area around the crater as a risk zone, although there is no imminent risk of eruption.
The volcano, located near the popular tourist resort of Pucon, is one of South America's most active.
Chile, situated on the so-called Pacific Rim of Fire, has the second largest chain of volcanoes in the world after Indonesia, including around 500 that are potentially active.