Opposition party Projet Montréal had previously stated it would present a motion to repeal the bylaw at Monday's council meeting.
Bylaw P-6, which passed last spring during the student movement, makes it mandatory for protesters to submit their route to authorities in advance. It also makes it illegal to wear masks at demonstrations.
At least 500 people gathered at Place Vauquelin to protest the bylaw, which they were calling undemocratic.
Early in the evening, Montreal police confirmed one arrest had been made. A 31-year-old man is accused of assault on a police officer, obstructing police work and resisting arrest.
Many of the protesters wore panda masks in solidarity with what has become the city's protest mascot, Anarchopanda.
The protesting panda recently launched a fundraising campaign to help support a legal battle against the bylaw.