The operation is the largest of its kind since Italy’s populist government implement its hardline anti-immigration policy.
Bulldozers tore through the San Ferdinando shanty town under the supervision of 600 policemen, destroying some 400 shacks which have housed migrants since 2010.
Most of the migrants are from sub-Saharan Africa and work illegally for local farmers for pittance pay.
Some said they are paid €2 an hour, €7.50 below the legal minimum wage.
Last month, the mayor of San Ferdinando, Andrea Tripodi, said the camp was a danger to health and a fire risk.
Four migrants have died in the camp in fires over the past year.
The blazes were caused either by arson attacks or accidents, according to Italian association Doctors for Human Rights (MEDU).
The government vowed to shut down the camp after the most recent fire, in which a 29-year-old man died.
“As promised … we went from words to actions,” Interior Minister Matteo Salvini said of the camp’s closure.
Salvini, who is also head of the ruling far-right League, had said the migrants would be relocated to reception centres, but several told local media that they still did not know where they would be housed and were seeking shelter in abandoned houses in the countryside.
Many feared they would be taken far from the nearby farms where they work.
MEDU slammed the camp’s closure, saying the move was made “without taking into consideration either the individual rights of the migrant workers, nor the long-term commitments made by regional and local institutions and associations to promote social integration”.