The municipality of Wabush issued a news release, saying it had declared a state of emergency because of air quality concerns from the blaze in consultation with the province's Department of Natural Resources.
The fire was also blamed for a breakdown in phone service for calls made between Wabush and the neighbouring town of Labrador City, including those to 911.
"All Wabush residents should prepare to leave their property," said the release. "The town will notify citizens street by street in accordance with the town's emergency plan."
The government said about 1,800 residents were affected by the mandatory evacuation order.
Residents were advised to report to a reception centre at an arts facility in the neighbouring town of Labrador City where the Red Cross would be on hand. On Facebook, residents in Labrador City eagerly offered up spare beds, couches and floor space for displaced families.
Wabush Mayor Ron Barron warned residents they could be away from their homes for some time. The wind forecast for Saturday was not expected to be favourable in terms of speed and direction.
"Once you have left, you will not be allowed to return to your property until the state of emergency is officially declared to be over," Barron said in a statement.
"That could be several days."
Officials issued a precautionary evacuation notice late Thursday after the fire shifted closer to the town. Residents were told at that time to prepare a kit with any medication, extra clothing, cash, bank cards and a cellphone.
Chuck Porter, a conservation officer with Natural Resources, said residents were complying with the evacuation order without complaint.
"We're being very proactive here and putting in a precautionary measure to make sure we can suppress this fire as effectively as possible and, at the same time, protect the residents of Wabush," he said in an interview.
"We can only predict so much. If there's even a chance of air quality being insufficient in Wabush tomorrow or the smoke or fire coming closer, then that's why we're recommending the measures we are. We certainly don't want to put anyone's safety at risk here."
A fourth water bomber and additional ground help were dispatched early Friday to the area to help fight the blaze. Porter said suppression efforts focused on the part of the fire burning closest to the community. He said the smell of smoke was wafting through the air and soot could be seen settling on vehicles.
Heavy machinery was also being used to move earth and create a 300-metre barrier known as a firebreak in hopes of keeping the flames away from the community. About 40 firefighters were attacking the fire on the ground.
"If the winds are the wrong way tomorrow, then that's when you would get the fire approaching town further," said Porter. "There is potential that it could move, so that's what we're preparing for."
Barron urged curious residents to remain safe and allow firefighters to do their work.
"Again citizens must not congregate on vantage points to look at the fire, as roads must be kept clear," he said in a statement.
The fire, which had consumed about 60 square kilometres since Sunday, was prompting intermittent partial closures of the Trans-Labrador Highway. Canada Day festivities planned for Monday in Labrador City were postponed.
The town said the Royal Newfoundland Constabulary was working with Bell Aliant to repair the phone problem. On its Facebook page, the communications company blamed the issue on a fibre break due to the forest fire. Residents were being provided with alternate phone numbers to report emergencies instead of dialing 911.
Newfoundland and Labrador Hydro was also warning of potential power outages as a result of the fire.
"To ensure the safety of customers and the public, electricity service may be temporarily suspended in Labrador West," the utility said in a news release.
"Our customers are advised to take necessary precautions to prepare for a possible extended outage."
The provincial government also expanded its ban on outdoor fires for forest land in all areas of Labrador because of ongoing hot and dry conditions.
— By Melanie Patten in Halifax
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