Officers said the "most significant activity" took place at the Queen Victoria Market where protesters chanting "freedom" were met with a heavy police presence.
The demonstrators at one point linked arms as they were surrounded by police officers.
Scuffles broke out as arrests were made.
A Victoria Police spokesman said there were between 200 and 250 people involved in the protest activity, and 176 were fined.
"A 44-year-old Burwood East man, believed to be a primary agitator for these protests, remains in police custody and is expected to be charged with incitement," the spokesman said.
Police said a search warrant would be issued for his home.
Another person was arrested for assaulting police. No police are believed to have been injured in the protests.
"Police were disappointed that many protesters were aggressive and threatened violence towards officers," the spokesman said.
It is the second day this weekend and the second week in a row of similar protests in and around the city's CBD.
The so-called Freedom Walk marches are billed as "a legal walk, allowing citizens to come together, get healthy and talk about getting our freedoms back".
Any protesting is outlawed in Melbourne under the current stage 4 restrictions, and people are only allowed to exercise for one hour a day within a 5 kilometre radius of their home.
Gatherings are completely banned.
Police said investigations into the demonstration were ongoing and further fines were expected "once the identity of individuals has been confirmed".
"Protesting is selfish, protesting is stupid and protesting is dangerous," Premier Daniel Andrews said today.
"And if you do it, you will be dealt with, you will be fined.
"No protest, regardless of the cause … is safe, responsible and anything other than selfish at this time."
Yesterday, police arrested 14 people and issued more than 50 fines at what police called "disappointing" smaller protests at a number of Melbourne locations.
Last Saturday, more than a dozen people were arrested in Melbourne as "solidarity" rallies were held in Sydney and around the country.
People face on-the-spot fines of $AU1652 ($NZ1802) for breaching the Chief Health Officer's stay-at-home orders and can face further criminal charges.