An underwater volcanic eruption has prompted the authorities to evacuate about 500 people from a village on Spain's El Hierro island in the Canaries, officials said Tuesday.

The eruption was detected on Monday five kilometres (three miles) from the island at a depth of between 500 and 1,200 metres (1,640 and 3,940 feet) beneath the sea.

Experts had said the eruption would not be felt on the island.

But seismic activity now pointed to the risk of another eruption closer to the coast, said the director general of the Canaries' emergency commission, Juan Manuel Santana.

As a result, the regional government will relocate the roughly 500 people living in La Restinga, which is the closest residential area to the eruption, he told a news conference.

"An eruption in shallower waters would produce a greater risk because of the greater interaction of the water with the magma," he warned.

"We must continue to follow how the phenomenon develops, what we are putting in place is simply a preventative measure."

Village residents will likely be transferred to facilities at a football field further inland, the regional government of the Canaries said in a statement.

Spanish Prime Minister Jose Luis Rodriguez Zapatero met with several ministers, including Defence Minister Carmen Chacon, and volcano experts later on Tuesday to analyse the situation, his office said.

The regional government of the archipelago on Monday issued a "yellow" volcanic eruption alert -- the second level on a scale of four -- after the island was hit by a 4.3-magnitude quake.

El Hierro, which means iron in Spanish, is the smallest of Spain's Canary Islands, located in the Atlantic off the coast of Morocco. It is home to some 11,000 people.

The last volcanic eruption on the Canary Islands was on nearby La Palma in 1971.