Home Minister Ahmad Zahid Hamidi said the effort will need more coordination between the Immigration Department, police, National Registration Department, People's Volunteer Corps and the Civil Defense Department.
"We will launch a massive operation on illegal immigrants nationwide after the Raya festivities to weed out problems such as drug trafficking and other criminal activities," he said.
Raya marks the end of the Islamic Ramadan religious period.
Zahid said authorities are targeting entertainment centers, factories, farms and plantations known to employ illegal immigrants, the Times reported.
Zahid said raids already have been conducted at Ramadan bazaars where several traders among 120 arrested were found to have sold their stall permits to illegal immigrants.
"We will continue to monitor activities throughout the [Raya] festive season," he said.
Zahid's comments, made during a meeting with Immigration Department staff, came after a National Registration Department official reportedly said that since 1990 about 60,000 foreigners in Sabah state had bought fake ID cards.
Jeffrey Kitingan, a politician from the Sabah town of Bingkor, told a Royal Commission on Immigration this month the NRD official had shown him a list of the people when he went to replace his own lost ID card, the Bernama news agency reported.
"I was brought to a room by one officer who showed me the list and told me he felt sad that such a scenario was happening in Sabah and that the people on the list were just a small number, but many more were to come."
The country of 29 million people has been struggling with illegal immigration since the early 1990s when its economy began improving, especially in relation to Indonesia and the Philippines.
A report in January by the International Business Times said about two-thirds of the Malaysia's 3.1 million foreign workers are in the country illegally.
Illegal Indonesians in Malaysia tend to work in construction, in domestic service or on palm oil plantations, usually for very low pay under unpleasant working conditions, the New York newspaper said.
Indonesians can integrate into Malaysian society easily compared with other foreigners because the two cultures are similar in religion, language, customs and food.
Malaysia has had an ongoing policy of amnesty that leads to deportation under the so-called 6P program -- Illegal Immigrant Comprehensive Settlement Program. The program starts with an amnesty for illegals, but ends with their deportation instead of prosecution for suspected criminal activity.
The Straits Times reported in May that Penang state's Immigration Department was advising illegal immigrants and those who have overstayed their visas to opt for deportation under 6P, which has been extended indefinitely.
The department's deputy director of enforcement, Basri Othman, said illegals would otherwise face the full force of the law if caught by authorities.
Basri said between January and May 23, 47 immigrants from Myanmar, Indonesia, Bangladesh and Cambodia were sentenced to whippings after being found guilty of offenses under the Immigration Act.