About 15 people were at the site and were given time to gather their belongings.
Police say they are acting in support of the city of Montreal and began the operation shortly after 5 a.m.
About 15 people were on site and were cooperating with police officers, spokesperson Véronique Dubuc said.
As of 8 a.m., police said they were giving the protesters time to gather their personal belongings inside the encampment.
No arrests were made in connection with the encampment itself. However, officers on site recognized an 18-year-old man “on the outskirts of the encampment” who was wanted for allegedly assaulting a police officer on June 25.
The man was arrested and brought to a local police station for questioning.
The Montreal police are referring reporters to the city of Montreal when asked why the encampment is being dismantled. A spokesperson for the city said it will not be commenting on the dismantlement until the police operation has concluded.
Protesters erected the encampment in Victoria Square on June 22. Earlier this week, organizers said roughly 50 people have been staying there since.
This story will be updated.