While the custom sm.voxelTerrain library allows for spawning voxel terrain at runtime,
the official way is through a callback in the terrain script.

This callback is called GetVoxelTerrainForCell and is actually available in vanilla SM!
However, as the voxel libraries are empty in vanilla, the callback cannot perform any useful action by default.

With the VoxelTerrain DLL though, the sm.voxelTerrainGrid library does contain functions
which exist specifically to generate voxel terrain chunks using GetVoxelTerrainForCell.

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GetVoxelTerrainForCell

function GetVoxelTerrainForCell(cellX, cellY)
    -- code here
end

Called by the terrain generator to generate voxel terrain chunks for the terrain cell at the given cell index.

sm.voxelTerrainGrid API functions can only be used in the context of this callback.

Unlike other terrain callbacks, this one does not use a return value to receive the chunk data.
Instead, the createChunk and/or createSerializedChunk functions must be used.

Note that any chunks generated here must be located inside the cell chunk index bounds for this cell.
Creating a chunk outside of these bounds is considered to be an error.

As for generating the actual voxel data in the chunks,
consider researching noise-based procedural voxel terrain generation.
Some alternative methods also include, but are not limited to:

• Pre-generating raw voxel chunk data using external software and importing it through e.g. sm.json
• Manually designing a world using the sm.voxelTerrain APIs, exporting its chunks and re-importing them

note

This is a one-shot callback - it is only ever called one single time for each terrain cell in the world,
when that cell is generated for the very first time.
It is never called more than once for any given unique cell index, even if the cell is reloaded,
the save file is reloaded or even the entire game restarted.
Once any given cell has been generated, the terrain script cannot make any further changes to the chunks in that cell.