A photograph posted on the local RTC TV station website showed a huge plume of smoke rising into the sky, visible from the capital Praia on a neighbouring island.
"Things could deteriorate in the coming moments, in the coming hours", Jose Maria Neves in a statement on the government website.
"We've called on people to heed the authorities' instructions. People should abandon Cha das Caldeiras", he said referring to a hillside community.
It was not immediately clear if there were injuries or deaths following the eruption. The volcano last erupted in 1995, causing minor damage. A larger eruption occurred in 1951.
The government planned to send a plane providing assistance to residents, Neves added.
The former Portuguese colony is located about 600km off the coast of Senegal. Fogo's volcanic peak, surrounded by vineyards, is a hiking destination.