President Salva Kiir issued the order Monday evening after fighting raged in the capital, Juba, for the fifth straight day.
Fighting was heard in several other parts of the city throughout the day, including the tinderbox Gudele neighbourhood - where rebel leader turned vice president Riek Machar is headquartered - and the central Tongping area near the global airport, with gunfire intensifying and subsiding at different times.
Machar responded by ordering his troops to stand down.
President Kiir's remarks came after the UN Security Council called for both sides to end fighting.
"It's an ordered departure adjusting the footprint in response to the situation", he added. Oil production, by far the biggest source of government revenue, has plummeted.
Many fled their homes in the past two years to escape ethnically targeted violence.
Two U.N. peacekeepers from China were killed at the base Sunday night, according to Chinese state media.
The fighting began in the morning and continued until about 8 p.m. local time, when a large thunderstorm seemed to put a damper on the violence, said United Nations mission spokeswoman Shantal Persaud. "All we can hear is the fighting outside".
Under a peace deal signed in August, Kiir became the president of the country, and Machar the first vice president.
"In the last 2 hrs, we went through heavy bombardments by Pres Kiir helicopters", Machar wrote on Twitter Monday. Civil war broke out in 2013 a few months after Kiir sacked Machar as his deputy.
Kiir and Machar signed a peace accord a year ago and formed an uneasy transitional coalition government. In April, Machar returned to the capital to again take up the post of vice president, saying that "peace is the only choice for us to relieve our people the undeserved suffering associated with armed conflict enforced upon them".
India is preparing to evacuate its citizens from strife-torn South Sudan, where fight between rival factions of soldiers resulted in the death of close to 300 people.
The U.S. government has ordered the evacuation of non-essential personnel from the capital and demanded an immediate end to fighting.
Experts say the failure to swiftly implement important elements of the deal, such as integrating and demobilising their forces, has allowed tension to fester and risked igniting a new conflict.
The Health Ministry said at least 271 people were killed in Friday's clashes, while the number of casualties in fighting since Sunday is not yet known. Sunday and Monday's fighting was more fierce.
The U.N. mission said that 1,000 internally displaced people had fled its protection as violence hit areas near their camps. It said United Nations sites had been hit in exchanges of fire, killing eight and injuring 67.
Widespread shooting preventing residents from moving in the city.