Around 25 people were involved in the clean-up of two beaches spanning one kilometer (0.6 miles) in southern Johor state, local government official Ling Tian Soon told AFP.
"Work began today and we hope to complete the task tomorrow. From our observation, marine life or fishermen activities have not been affected," he said.
The oil spill resulted from an accident on Friday at Singapore's Pasir Panjang terminal between a Netherlands-flagged dredger and a stationary Singapore-flagged bunker vessel, Singapore's Maritime and Port Authority (MPA) said.
Photos posted on Ling's Facebook showed men in white protective gear picking up black sludge from a beach and placing it into plastic bags.
Ling added that Malaysia's maritime officials were monitoring to see if the oil spill spread to other parts of the coast.