Reports say 18 people, including 11 police officers were injured during the fighting between largely left-wing locals, anarchists and the police. Dozens of people were arrested.
Barricades were set up by the rioters, and rubbish bins set alight in the roads once the trouble began.
The Schanzenfest had attracted some 8,000 people on Saturday, and had been peaceful until the evening, when the fighting started, with bottles and stones thrown at riot police.
A similar outcome occurred last year as the festival came to an end.
The area is home to the Rote Flora theatre, which has long been a bone of contention between locals and the authorities, as it is used not only by artists, but also left-wingers and political activists.
It was stormed by police in July after officers tried to arrest a man who had been involved in a fight with a woman and run from the authorities into the building. When they tried to seize him, others in the building attacked the police, sparking a full-scale raid.