Police were forced to break up organised fights and deploy pepper spray on several occasions to keep the peace.

Youths were moved out of Federation Square and police officers blocked entrances to prevent their return.

One group of youths chanting "Westside" were granted police escorts as officers moved them away from Federation Square and towards Russell Street.

A huge police presence, bolstered by police horses and specialised officers from the public order response team, dealt with small fights and altercations in the areas around Swanston Street, Flinders Street and Federation Square.

Police arrested 53 people and conducted more than 800 weapons searches in the CBD on Friday and Saturday. Weapons seized included knives, a Taser, and a knuckle duster.

Fourteen people were arrested for being drunk, nine on weapons-related offences, five for riotous behaviour, one for hindering police, four for assaulting police, two for criminal damage and one for robbery.

Police used pepper spray at least twice to subdue youths, as a number of small brawls erupted at Federation Square after the Moomba Festival.

Two police were treated for minor injuries and several bystanders were treated for secondary pepper spray.

As tensions heightened early on Sunday morning, police closed Federation Square to avoid an organised brawl, and used pepper spray to break up another organised fight next to Princes Bridge.

Two men were brawling at about 11.45pm when the spray was deployed, which dispersed a massive group of people who had gathered to watch.

Bystanders who had nothing to do with the groups involved in the fight were also affected by the spray.

Earlier in the evening, police horses were used to bolster a huge police presence at Federation Square in a bid to prevent a repeat of last year's terrifying brawls.

Tensions flared at one point, with one man seen dousing his eyes after police used capsicum spray to break up a fight. Another took off his shirt which had been covered in the spray.

Another sign of trouble came when a group of officers ran towards Russell Street, with a number of public order response cars then heading off in a pursuit.

And a man was arrested outside Young and Jackson Hotel after an incident out the front of Flinders Street Station near the tram stop.

By 10pm, Ambulance Victoria spokesman John Mullen said paramedics had not reported any major incidents.

Towards 11pm, the families who had been sitting in Federation Square gave way to hundreds of youths, most of whom appeared to be hanging around to watch whatever unfolded.

Earlier in the day, families sat on the banks of the Yarra River to enjoy the waterskiing competition and fireworks display.

South Sudanese Community in Victoria chairman Kot Monoah, who was patrolling with other community elders in high-vis vests, said there had been rumours earlier that some youths intended to cause trouble.

"That was the intelligence during the day but I don't think it has proven [true] unless obviously something happens ... the night's still rolling," he said.

However, he said revellers he had seen and spoken to seemed intent on having a good time.

"We are with them at the moment, even at the moment we are in central Melbourne talking to them," Mr Monoah said.

"I think the general mood is just kids trying to have some good times, trying to obviously have fun.

"They are out having fun."