Police on Friday forcibly ejected some 30 indigenous activists and supporters from Rio's former Indian Museum located next to the Maracana stadium, the venue for the 2014 World Cup final.
As the city's shock police battalion carried out the assault, supporters of the activists who were outside the building tried to intervene but were dispersed with tear gas.
Demonstrators chanted "murderers, fascists," as the operation took place.
The planned demolition is at the center of a months-long legal tussle, with authorities saying they will raze the abandoned colonial-style building at the request of football's world governing body as part of an urban renewal program.
But the agency in charge of protecting the city's cultural heritage and the Rio's prosecutor's office are opposed.
The Maracana sport complex is getting a thorough facelift for the World Cup and the 2016 summer Olympics.
"We do not want public space to be turned over to the private sector. We don't want a shopping mall near Maracana, we want a cultural center," said one activist.
Police carried out the operation soon after midday after hours of negotiations between indigenous people and representatives of Rio de Janeiro state.
More than 250 police faced off against bare-chested native militants donning feathered headgear.
Earlier, some of the activists agreed to leave the building to go to a central Rio hotel provided by authorities.
Twenty-three indigenous families had since 2006 been living in shacks around the dilapidated museum building, which they want to turn it into Rio's first native academic institution where ancestral skills would be taught.
The building housed the first Indian Museum from 1953 until 1977 when it was transferred to the Botafogo district.
The empty edifice is now owned by the agriculture ministry.
In January, Rio state Governor Sergio Cabral was forced to suspend the demolition of the edifice, which is to be converted into stores for the Maracana complex.
The governor pledged to build a native cultural center in another neighborhood but the indigenous community resisted, fearing this would never materialize.
The activists argued that the former museum evokes the memory of the Maracanas, one of the original local native tribes.
The indigenous community represents less than one percent of Brazil's 194-million-strong population and occupies 12 percent of the national territory, mostly in the Amazon.