The UN plans to launch an international appeal for contributions within days, he said on Saturday.
"It's already a very major crisis" he said, adding that more than 500,000 people have either been forced to flee or are trapped.
"This number will grow dramatically as the population of south Lebanon has been asked to leave [by the Israeli army]."
He said: "The whole thing has to stop. It's no natural disaster but a man-made crisis. This is a senseless war. It should never have started. It should never have been carried out like it is now."
Egeland was speaking to reporters in Cyprus' Larnaca airport before his trip to the Middle East.
Egeland will arrive in Beirut on Sunday before travelling to Israel on Tuesday.
Egeland called on Israel to guarantee safe passage for humanitarian goods into Lebanon by road, sea and air.
Lebanon's only international airport, Beirut's Rafiq Hariri Airport, has been closed since Israel bombed its runways on the opening day of its offensive on July 13.
Egeland said: "Israel has given initial positive assurances that they want to work with us to establish these corridors but we still do not have a formal go ahead."
Israel lifted its sea blockade on Friday after Dan Gillerman, Israel's ambassador to the UN, said his country would open a humanitarian corridor for food, medicine and other supplies.
|Lebanese civilians have borne the brunt of Israeli airstrikes|
Egeland also criticised Israel's military actions which have already killed at least 372 people in Lebanon.
The Israeli military response has been "disproportionate, when to my thinking one third of the wounded and killed are women and children, then it clearly goes far beyond responding to armed groups," he said.
During the same period Hezbollah has killed 34 Israelis, including 15 civilians who died in rocket attacks on towns and cities in northern Israel.
Meanwhile, international aid groups began using Cyprus as a stopping point for aid destined for Lebanon.
A spokeswoman for the humanitarian group Medecins Sans Frontieres, said 80 tonnes of aid supplies that included family tents, blankets and hygiene kits were scheduled to be flown into Larnaca, late on Saturday for transfer to a Beirut-bound ship on Sunday or Monday.
The international Committee of the Red Cross (ICRC) announced it has opened a new logistics base in Larnaca, with warehousing space.
The base will handle all goods to be shipped by the ICRC to Beirut or other ports in Lebanon, and will begin receiving the materials on Sunday.
Egeland, who will visit Israel and the Gaza Strip on Tuesday and with Israeli officials, also expressed alarm over the humanitarian situation in the Palestinian territory amid the Israeli offensive there.
Palestinian society is in "in its gravest hour of need in many years. We need a more effective relief effort there and we need Israel to enable the relief effort more effectively," he said.
Israel launched a massive air and ground assault in the Gaza Strip after Palestinian militants there kidnapped one of its soldiers in late June.