The residents of 60 tents are being evicted by police and social workers, Dornbirn city spokesman Ralf Hämmerle said.
Between 140 and 200 people are believed to have been camping out by the Ach, according to official estimates.
Mayor Andrea Kaufmann (ÖVP) said that it is believed that most of the inhabitants of the camp are from Romania, and belong to the Roma ethnic minority. Many are thought to be supporting themselves by begging in the city centre.
Local MP Marie-Luise Hinterauer (ÖVP) said everyone evicted would be offered a ticket back to Romania and that a bus was waiting to transport people on Monday morning.
She said everyone in the camp had been informed early last week that the eviction would take place, but that she had the feeling that most people were “waiting until the last minute”.
Last week 22 people took up the offer and returned to Romania.
Mothers and children as well as pregnant women who had been living in the camp were taken to shelters in the last few weeks, as the weather got colder.