Police were called to the Octagon shortly after 9.30pm following reports one of the protesters has been assaulted, Senior Sergeant Brian Benn said.
It appeared the man, who had earlier attended Melbourne Cup celebrations at Wingatui, decided to "remove the protesters himself".
The Dunedin man began pulling out tent pegs, before headbutting a member of the group, he said.
Alcohol was believed to have been a factor.
The 49-year-old was charged with common assault and was expected to appear in Dunedin District Court next week.
Yesterday the Dunedin City Council issued a trespass notice for the occupiers to leave by 8pm, but protesters and their tent continue to remain on site this morning.
The group have been at the site since October 15.
A Dunedin Police spokeswoman said police were still considering their options, and would not be rushed into any decision.
