Tan Chai Ho, deputy home affairs minister told AFP that some 25,000 members of a controversial volunteer security group are undergoing training to assist in a 500,000-strong force that will carry out the operation.
The sweep will target illegal immigrants who have failed to take up a government offer of amnesty in return for leaving the country voluntarily, officials said.
Tan dismissed reports that some migrants had built tree-top houses in the jungles of eastern Sabah state on Borneo island in a bid to evade capture.
"There is no way they can escape the dragnet," Tan said, adding that enforcement officials, including the police and immigrations officers would be deployed to every village and town to arrest illegals.
"We hope the illegals will leave the country on their own free will. Please don't wait to be arrested," he said.
Malaysia has extended until the end of this month the deadline for illegals to return home. It had earlier given them until the end of the Eid-al-Fitr Islamic holiday in mid-November to leave but the response had been poor.
Tan said since mid-October some 150,000 illegals had left the country.
Tan said members of the volunteer security group, now being trained by the police, immigration and national registration department officials, would be armed with batons and handcuffs while officers would carry a pistol.
Human Rights Watch has described the use of volunteers as "ominous", warning it would lead to vigilantism.
Malaysia's Immigration Director Ishak Mohammad meanwhile on Friday said the Indonesian navy would provide four navy ships to ferry its nationals home from next week.
Ishak said some 25,000 Indonesian migrants are expected to utilise the service which will begin on Monday.
Once the amnesty expires, illegal immigrants face jail sentences of up to five years and a whipping.
Tan said 18,607 people have already been caned, mainly from Indonesia, Myanmar and the Philippines, for entering the country without valid documents.
Many illegal immigrants risk staying in relatively-prosperous Malaysia because they face unemployment and poverty in their own countries.