A 16-year-old boy who allegedly set off one of several flares was the only person arrested out of an estimated crowd of 7500.
Several people were evicted from the live site following a small brawl in the viewing area, which had reached capacity by 10am.
Police said two boys, aged 14 and 15, and a 19-year-old man were issued penalty notices for riotous behaviour and given directions to leave the area.
Police said they would review CCTV footage to identify others responsible for setting off flares.
Fans, mostly teenage boys dressed in a sea of green and gold, began gathering ahead of Australia's match against Paraguay, which kicked off at noon.
It is unclear whether planned intensive security checks could be conducted as the crowd streamed through the site entrance.
Police said the venue was responsible for ensuring prohibited items such as flares did not enter the live site.
At least seven flares made it through security, with fans cheering as they were set off.
Just after 10am, fans were told to head to nearby AAMI Park to watch the match because Federation Square had reached capacity.
Inside, soccer fans young and old, many of them teenagers who should have been at school for the last day of term, gathered to experience the "atmosphere" of watching with a crowd.
The teens, some wearing the Australian flag as a cape, were relatively well-behaved, cheering and chanting as others bounced beach balls around the crowd.
Chants of "Aussie, Aussie, Aussie" could be heard throughout the site.
Year 10 students Adrian, Jaxon, Ben and Xavier said they skipped school to be part of the day, something their parents were not aware of.
"We're skipping today, I'm telling you," one of the boys said.
"They'll never know."
Another group of teens, Atticus, Milla and Jonah, said they had come to Federation Square with their parents' blessing, given it was the last day of school term, and said they couldn't wait to cheer the Aussies home.
There was a noticeable police presence, with many officers wearing protective sunglasses and black helmets, watching the crowd from a distance.
Elsewhere, Tumbalong Park in Darling Harbour became Sydney's flagship live site while Brisbane-based Socceroos faithful gathered at South Bank and those in Perth watched at Northbridge Piazza.
The Socceroos' draw at Levi's Stadium in Santa Clara meant they finished second in Group D.
They will now face the runners-up from Group G - which features Belgium, Egypt, Iran and New Zealand - in Dallas.
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