The migrant workers will be identified and moved by train to eastern states, the officials said.
Last week, suspected militants barged into a house in southern Kashmir, marched out six men who had come to work in the orchards and paddy fields from West Bengal, lined them up and shot them, police said.
Five died, a sixth, who the gunmen had left for dead, survived, to tell the tale that has fanned fears of further attacks on outsiders, officials say.
"We have orders from the state leader to escort all the Bengali labourers out of Kashmir after five Muslim labourers from West Bengal were killed," said a senior police official in Kolkata, capital of West Bengal.
Migrant workers are a soft target for militants, and during the past few weeks 11 have been killed, including the victims of this latest atrocity, the government said.
Much of Kashmir's economy is dependent on outside labourers who work in construction, hotels and apple orchards.
None of the militant groups that are fighting Indian rule in Muslim majority Kashmir claimed responsibility for the attack on migrant workers.
The separatist insurgency in Kashmir began three decades ago, but the latest flare up in violence followed Prime Minister Narendra Modi's decision in August to take away the autonomy previously offered to India's only Muslim majority state.
India is hoping that by opening up property rights in Kashmir to people from outside the region it can reignite economic growth, create jobs and turn the focus away from a militant uprising in which more than 40,000 people have died.
But for the government to have any chance of succeeding, it will have to remove the growing sense of insecurity among Indians who have risked coming to Kashmir to make a living.
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