The United Nations is expecting huge numbers of civilians to flee when Iraqi forces mount an offensive to retake the city of Mosul from Islamic State militants.
It is not clear when Iraqi forces will be ready to attack the northern city.
The much anticipated counter-offensive has been repeatedly postponed because Iraqi forces are unprepared and bogged down in battle elsewhere.
Bruno Geddo, UNHCR representative in Iraq, said the agency was preparing to help people fleeing Mosul and potential sites had been identified for new camps, although there will not be enough room for all.
A large part of Mosul's population of more than 1 million remained in the city after it was overrun by Islamic State in June 2014 and are now banned from leaving by the hardline militants, who have proclaimed a caliphate straddling Iraq and Syria.
"This time the humanitarian community is acutely aware that there will be no justification if we are caught unprepared again," Geddo told Reuters in an interview. "This will probably entail massive civilian displacement".
That will compound an intensifying humanitarian crisis in Iraq, where the number of internally displaced persons (IDPs) has reached 3.2 million - about a tenth of the population.
The governments in Baghdad and the autonomous Kurdistan region are encouraging civilians to return to areas that have been retaken from Islamic State, but Geddo said rushing the process could backfire.
"If there is still total destruction and complete insecurity or lack of acceptance for returning IDPs on the part of those who remained behind, returns, which should be the corollary of reconciliation, could actually end up creating even more tension and therefore it would defeat the purpose," Geddo said.
The immediate priority is to prepare for winter, but with humanitarian operations in Iraq suffering from a shortfall in funding, resources are limited.
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