According to US Census data, over 160,000 people live in the area.
Late on Sunday night the threat decreased when water stopped flowing into the emergency spillway.
The erosion at the head of the emergency spillway threatens to undermine the concrete weir and allow large, uncontrolled releases of water from Lake Oroville, the California Department of Water Resources said. This is NOT A Drill. The main spillway is damaged too from significant concrete erosion but was being utilized to release water from the swollen dam Monday, according to DWR.
Officials in California were racing against the weather Tuesday, struggling to shore up the Oroville Dam's emergency spillway before more rains pummel the area and place the structure under even greater stress.
The structure is nearly 50 years old and located upstream from the town of Oroville, which has 16,000 residents.
Evacuee Karina Garcia looks at the Placer County Fairgrounds evacuation center in Roseville, California on Monday.
"They have what they expect to be an imminent failure of the axillary spillway", said Mike Smith, a spokesman for the California Department of Forestry and Fire Protection.
A change in conditions gave engineers working to fix the erosion a brief respite as water receded, but up to 10 inches of rain is expected for the California Mountains later in the week.
People living in flood risk areas have been ordered to leave immediately.
In a statement posted on social media on Sunday afternoon, Mr Honea ordered residents to evacuate, repeating three times that it was "NOT a drill".
Ron Stork, a senior policy advocate with Friends of the River, said the groups had concluded that "the Oroville Dam complex could not be used safely or confidently to conduct flood control operations".
Bill Croyle, the acting director at the department of water resources, said at a news conference that no corrective measures were taken after looking at the flow and available resources.
There have been concerns about Oroville Dam safety since the erosion was discovered Tuesday at the primary spillway at Oroville Dam.
Most of the major reservoirs in California are now above average, according to the California Department of Water Resources, because of plentiful rain and snow.