Police said Thursday they were told of structural problems in the area of 11th Street East and Melrose Avenue earlier in the day.
Barricades were set up and traffic was being rerouted between the 200 and 300 block of 11th Street East and at 10th Street and Melrose Avenue.
Work crews, city officials and Saskatoon Mayor Don Atchison were also on the scene.
Around mid-afternoon officials from the city were asking people who live in a two-block area to leave their homes, at least for Thursday night.
Transportation was made available and officials were offering the evacuees dormitory space at the University of Saskatchewan.
Terry Ratz has lived in his home on the 200 block of 11th St. East for more than 20 years. When he went home for lunch Thursday, he saw emergency vehicles and city crews in front of his house.
Despite the suggestion from the city to leave, Ratz said Thursday night he would stay put for the time being.
"We're going to wait until the last possible moment," he told CBC News. "But if it does get anymore dangerous around here, we'll evacuate."
The problem was first noted when a resident in the area noticed the ground in their backyard had shifted, or slumped, by about 1.5 metres.
The movement made a mess of a tidy backyard that had a brick patio. The shifting also caused a power pole to topple.
Electricity was disconnected and workers from the power utility were on scene, making repairs.
City officials described the ground movement as "a naturally occurring slope failure," and said people were being asked to leave their homes as a "safety precaution."
"This is not a mandatory evacuation: it is a safety precaution only," the city said.
Police and fire officials were set to visit the homes to advise people of the situation.
Power to the area was turned off. Initially the city said it would be restored later in the day. However at 6 p.m. CST the city said the power would remain off until further notice.
Water service to the area has been maintained. Natural gas service, however, has been shut off.
Two information centres have been set up. One is at the corner of 11th Street East and Melrose Avenue, and another in the parking lot of Rotary Park, next to Saskatchewan Crescent.Suggest a correction