Hundreds of Malawians have been given two weeks to leave their houses in the capital before they are demolished.
Housing official Felix Tukula told the BBC the government wanted to evict those living illegally in Lilongwe on land meant for industrial developments.
Mr Tukula said the authorities would use force to remove residents if they refused to leave voluntarily.
The ultimatum follows a similar operation in neighbouring Zimbabwe, which has left some 700,000 homeless.
The Zimbabwe demolitions have been widely condemned in the West, but most African countries have refused to criticise President Robert Mugabe’s government.
Some residents of the affected areas, called locally Baghdad and Dubai, insist that they will not move as they have nowhere else to go.
"Our problem here is lack of land," one woman told government officials.
"Imagine you have a family and dependants but you have nowhere to stay. So if idle land has been found somewhere we have to share it," she said. Mr Tukula, however, insisted that the structures must be demolished and said that because they were illegal, those affected would not be compensated.
Wananga Mbeleka, regional manager for the state-owned Malawi Housing Corporation, said illegal settlements were a big problem and were greatly affecting town planning and the provision of services such as water and electricity.
"This problem of land encroachment has basically affected our land bank where we have future development plans for housing and [other] non-housing real [estate] properties like community services, churches, police units and health centres," he said.
Local MP Boniface Kadzamira, from the main opposition Malawi Congress Party, said the former government was partly to blame because it had stopped enforcing land laws.
"It’s a big problem," he said. "It started in 1997 and the previous regime neglected this issue.
"People have got used to this; they think getting a plot without proper procedures is a normal thing."
Original article link: http://news.bbc.co.uk/1/hi/world/africa/4748279.stm