The protest began on Friday and swelled over the weekend after fruitless negotiations between activists, city authorities and new artistic director Chris Dercon, the former head of London's Tate Modern.
"The talks have ended for now without results," the Volksbuehne theatre said on its Facebook page.
"It remains to be seen whether rehearsals will resume on Monday."
The protesters, who have formed an artists' collective called "From dust to glitter", plan to occupy the building in east Berlin for three months while staging performances free of charge.
They held their first "assembly" on Saturday evening, urging theatre lovers to show up in force and bring supplies such as toilet paper, printers and food and drink.
The appeal was so successful that police said no more supporters could be allowed in after the building reached its maximum capacity of 500 people.
With their protest action, the collective said it wants to "send a message against the current politics" and the creep of "gentrification" in Germany's capital.
Volksbuehne artists have been strongly critical of the theatre's new director Dercon, who replaced the renowned Frank Castorf who led the avant garde theatre for almost a quarter of a century.
Rebuilt after World War II in an imposing Stalinist style using remnants of Hitler's destroyed chancellery, the Volksbuehne prides itself on caustic commentary on political and capitalist hypocrisy.
A prominent theatre director as well as artistic director, Castorf was credited with turning the Volksbuehne into one of Europe's leading venues with his bold, controversial and often lengthy productions.
Dercon, whose nomination has been controversial ever since it was first announced in 2015, will be the first non-artist to take the helm of the fabled theatre.
Critics fear his tenure will herald a shift to less provocative and more commercial productions at the heavily subsidised Volksbuehne.
They have also questioned whether Belgium-born Dercon can bring the radical sensibility and awareness of Berlin's tumultuous history that is woven into the fabric of the theatre.