Police used tear gas, pepper spray and batons to disperse crowds of black-clad demonstrators -- most of them young people and students -- calling for authorities to scrap the Beijing-backed law.
Clashes broke out shortly after 3:00 pm (0700 GMT) -- the deadline protesters had given for the government to abandon the controversial bill.
Rows of riot police were quickly outnumbered by protesters -- many wearing face masks, helmets or goggles -- who gathered in the centre of the city ahead of a scheduled debate in the city's legislature
Matthew Cheung, Hong Kong chief secretary, urged protesters to end their protests and go home.
As the numbers of demonstrators continued to grow, the Legislative Council (Legco) said it would delay the second reading of the bill.
Organisers of a march on Sunday said more than a million people turned out to voice their objections to the proposed law, which would allow Hong Kong to send suspects to other jurisdictions around the world -- including China.
But the record numbers have failed to sway pro-Beijing chief executive Carrie Lam, who has rejected calls to withdraw the bill.
Many opponents are fearful the law would entangle people in the mainland's opaque courts, leaving them vulnerable to a justice system seen as acting at the behest of the Chinese Communist Party.
More than 100 Hong Kong businesses said they would close on Wednesday to show solidarity with the protesters. The city's leading student unions announced a boycott of classes to go to the rallies.
A string of other prominent unions in the transport, social work and teaching sectors either followed suit or encouraged members to attend while a bus drivers' union said it would encourage members to drive deliberately slowly to support protests.
Lawmakers had been due to debate the bill on Wednesday morning in the city's legislature, which is dominated by Beijing loyalists, with a final vote expected on 20 June
Hong Kong's leaders say the proposed law is needed to plug loopholes and to stop the city being a sanctuary for fugitives. They insist that safeguards are in place to ensure that political critics of Beijing will not be targeted.
But many Hong Kongers have little faith in the government's assurances after years of heightened fears that Beijing is trying to quash the city's unique freedoms and culture - despite a 50-year agreement between Hong Kong's former colonial ruler, Britain, and China that means the city is guaranteed freedoms unseen on the Chinese mainland.