Between 100 and 200 people were forced out of City Square, with some using passive resistance and others actively fighting back, the Melbourne Herald Sun reported. The city council ordered those in the encampment to leave.
Protests inspired by the Occupy Wall Street encampment in New York spread to Australia this week.
Two police officers and about 20 protesters were reported hurt. One of the officers and one protester suffered injuries serious enough to be taken to hospitals.
Assistant Police Commissioner Stephen Fontana said the officers involved used only the necessary force to carry out their orders.
"As the day started out we commenced with about 150 members," he said. "As the number of demonstrators increased we have actually got over 400 members out in the field and we will continue to keep moving through until they have cleared the streets."
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