Police began knocking down tents as protesters chanted, "The people united will never be defeated."
"This has been declared an unlawful assembly," an officer announced to the crowd. They were told they had at most 10 minutes to disperse.
It was estimated that more than 1,000 officers had the encampment surrounded. Before 11 p.m., police had closed off streets surrounding the protest, one of the largest standing in the nation.
Officials earlier in the evening had set a 10:30 p.m. deadline for the hundreds of protesters remaining to disperse from the grounds.
About 30 MTA buses carrying LAPD officers departed from Dodger Stadium, where police had gathered as a launching point.
Supervising officers briefed officers at the stadium, with one telling a group of officers they needed to be prepared for some protesters to fight back.
"They've got a bunch of concrete gravel and other (things) they're going to throw at us," the supervisor said. "Please put your face masks down and watch each other's back."
Earlier in the evening, hundreds of protesters gathered to discuss emergency preparations. Many began moving their tents to the sidewalk.
"The one message I want to have is, the hallmark of this protest has always been peaceful, it's always been a nonviolent protest, it's always been protecting people's first amendment rights," LAPD Cmdr. Andrew Smith told members of the media at City Hall. "We're hoping that whatever happens in the future with Occupy L.A., it remains a nonviolent protest."
About half of some 500 tents remained after a Monday morning eviction deadline and the remaining protesters showed no sign of leaving the Los Angeles encampment, which is one of the largest still remaining in the country.
The LAPD issued a citywide tactical alert in response to the action, requiring all officers on duty to remain so until released.
Protesters began setting up barriers near the grounds of City Hall and fireworks could be seen shooting off above the encampment about 10:10 p.m.
The original deadline for Occupy protesters to leave the lawn at City Hall was 12:01 a.m. Monday, but hundreds refused to leave.
The encampment was calm and peaceful Tuesday morning. It was a contrast from Monday when the city was on a tactical alert, as police in riot gear moved into the area following the 12:01 a.m. deadline.
Police ordered protesters to vacate the area. In response, demonstrators began flooding the streets. Police corralled back to the sidewalk, saying they could temporarily return to their camps without risking arrests.
Protesters declared victory after police withdrew from the encampment. Police Chief Charlie Beck explained why they haven't arrested the remaining protesters who are now camping illegally.
Protesters remained adamant, saying they will not voluntarily leave the encampment.
The Associated Press contributed to this report.