The National Committee to Protect Oil, Gas, Mineral Resources, Power and Ports called for an eight-hour general strike in the capital protesting against government plans to build the coal-fired power plant near the Sundarbans.
The 1320 MW coal-based power plant in Rampal Upazila is a joint India-Bangladesh project currently under commissioning.
The proximity of the project to the world's largest mangrove forest prompted protests from several leftist organisations from the beginning.
Environmentalists say the proposed plant would be a significant threat to the Sundarbans, a UNESCO World Heritage site. The National Committee has been leading the protests.
But the government maintains that it would not harm the Sundarbans.
Activists gathered on the Dhaka University campus since early on Thursday to organise the protest march.
Police lobbed tear-gas shells, fired rubber-bullets and used water-cannons to keep the protesters inside the campus.
Panic gripped the students, when at least six tear-gas shells landed in the premises of the Fine Arts Faculty near the Shahbagh intersection triggering running battles between police and protesters.
At least 10 activists have been admitted to Dhaka Medical College and Hospital after the shutdown started at 6am.
A police vehicle was damaged.
Half an hour later, the protesters once again started to approach to Shahbagh, one of the busiest traffic junctions in Dhaka, when police lobbed tear-gas canisters.
The agitators then started to demonstrate in front of the Arts Faculty with burning tyres.
Police used teargas, rubber bullets and water-cannons, whenever the protesters tried to approach to the Shahbagh intersection. Agitators also hurled brickbats at police.
Amid running battles, protesters took shelter in the Art Faculty premises to save themselves from the tear-gas, when several shells landed inside the faculty.
Protesters said several people have been injured due to the police action.
"Police have lobbed teargas and rubber bullets several times since morning," Iqbal Kabir, the coordinator of an alliance of the student bodies, told bdnews24.com.
A child also felt sick, when one of the shells landed on living quarters of university employees near the Arts Faculty.
"My wife and child were inside. The gas has made my child fall sick," Mohammad Solaiman, the child's father, told bdnews24.com.
Shahbagh police OC Abu Bakar Siddique told bdnews24.com, "Police stopped the protestors as they tried to approach the Shahbagh intersection. We put up a barricade in front of the police station.
"Police stopped the protesters, who were approaching to the Shahbagh intersection as there are some key establishments there, including a hospital," said OC Siddique.
University authorities said they were aware of the incident.
"We have got in touch with the police and requested them not to do anything, for which students and teachers have to suffer," DU acting Proctor Amjad Ali told bdnews24.com.
Police say they are stopping protesters from moving towards Shahbagh as there are some key establishments.
"There's a hospital and some other important establishments. Police have stopped them so that they cannot cause public suffering," said Dhaka metro police's Additional Commissioner Mizanur Rahman.
"Police lobbed tear-gas when the protesters hurled brick-bats," he told the media at Shahbagh.