Authorities want to clear the De Doorns refugee camp before the soccer World Cup starts, Breede Valley mayor Charles Ntsomi said on Friday.
He was speaking at a media conference called in Cape Town to announce details of the closure, scheduled for the end of this month.
He said it was vital to reintegrate the occupants "because South African law does not allow us to keep people in the camp".
"We felt it is now urgent we do it even before the World Cup," he said.
"We don't want to see people in camps during the World Cup. That's the crux of the matter."
The tented camp, on a sports field in the Hex River Valley town, was established in November last year to house several thousand people, mostly Zimbabweans, fleeing threats of xenophobic violence.
Most of them worked as casual labour on farms in the area, a centre of grape production.
NGO workers said on Friday they believed there were only some 600 people still in the camp.
Director for human rights support in the office of the Western Cape premier, Sifiso Mbuyisa, said officials met a group from the camp on May 5.
"The bulk of them... indicated a willingness to leave the camp," he said.
Residents of the camp were in fact constantly interacting with the community, moving in and out of the townships.
"We feel that's an indication they are willing to be reintegrated," he said.
The International Organisation for Migration, an NGO, had said it would provide financial assistance for those who wanted to return to Zimbabwe.
The municipality's media spokesman Manfred van Rooyen said officials would go with refugees who wanted to reintegrate in order to see whether landlords were ready to take them back.
Where homes had been demolished, the refugees would be given a starter kit of poles and black plastic.
The province's head of disaster management Hildegarde Fast said the possibility of having to go through the courts to secure evictions was at the moment "not even on the agenda for us".
Following the xenophobic violence in Cape Town, the vast majority of people had reintegrated voluntarily.
"We feel confident that with the current processes this isn't even on the radar," she said.
- Sapa
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