The former underground depot at Mitholz, which contains 3,500 tons of weaponry, has partially caved in and many of the explosives are now covered by fallen rocks.
Around half of the arsenal exploded in 1947, killing nine people, but the defence ministry said the risk of a second explosion had been underestimated for decades.
The ministry, which this week launched a consultation about the evacuation, said the risk had now become “unacceptable” and “total evacuation” was the best solution.
“Depending on how the work develops, residents should expect the evacuation to last up to more than 10 years,” the ministry said, adding that the explosives would not be removed until 2031 at the earliest.
It also said a major road passing through the village — a collection of chalet-style homes — could be rerouted and a railway line would have to be covered.
The ministry added, however, that closures of both “may become necessary, at least temporarily”. The consultation will last until April 17.
“If the evacuation creates insurmountable problems… it would still be possible to significantly reduce the risks by covering the depot with rock,” the ministry said.
The defence ministry website said thousands more tons of munitions had been dropped into several Swiss lakes but detonation could be “practically excluded” as the explosives were not as concentrated as at Mitholz.