A camp at Monash University in Clayton was one of five established at Victorian universities over the war in Gaza, with similar protests in every other state and one in the ACT.
Monash said organisers had notified them of their plan to pack up tents, banners and other remnants of the camp on Friday afternoon.
However, Monash Students for Palestine organisers accused university employees of forcefully dismantling the encampment against their wishes.
It comes as demonstrators occupying the University of Melbourne's Arts West building for a third day held unsuccessful talks with acting provost Pip Nicholson and deputy vice-chancellor Mark Cassidy.
Protest organisers insist they will not leave until the university discloses and divests its links to weapons manufacturing companies.
"We have received confirmation from the university that they have refused fully and explicitly to divest and cut ties with all weapon manufacturers," organiser Dana Alshaer told reporters after the meeting.
About 247 classes meant to be held in the building have been cancelled or rescheduled since Wednesday, affecting about 8300 students in the second-last week of the semester.
Signs were put up on Friday by the protesters indicating classes inside the building had been moved elsewhere by the university.
The University of Melbourne has refused protesters' divestment demands, organiser Dana Alshaer says. (Joel Carrett/AAP PHOTOS)
Organisers said the university had not given them formal orders to move on yet, which would open the door to Victoria Police being called.
Officers would only intervene if people were trespassing on private property and a formal report was made.
The university has labelled the building takeover a "significant safety risk" to students and staff and claims its property has been damaged.
"We are also deeply concerned by the escalation in action and disruptive intent of some, including external actors, to our Parkville campus," it said on Friday.
"There is no doubt that this group has underestimated their intimidatory impact on members of our community."
Protesting students have named the University of Melbourne's Arts West building "Mahmoud Hall". (James Ross/AAP PHOTOS)
Demonstrators say they will make a "collective decision" on what to do if police are called to remove the encampment.
"If police come here and brutalise students, it is the university's decision to do that," Ms Alshaer said.
Prime Minister Anthony Albanese urged the protesters to be respectful and not attack others.
"There is no place for some of the disrespectful ways in which some of these activities are happening - whether it be in some university campuses, or indeed, outside my electorate office," he told reporters in Melbourne.
Victorian deputy opposition leader David Southwick, who has a petition calling for the encampment to end, held a media conference at the campus on Friday that was gatecrashed by a pro-Palestine lecturer and a protester.
Pro-Palestine camps have sprouted at campuses across the country over the war in Gaza. (Joel Carrett/AAP PHOTOS)
On Thursday, the university issued a notice to non-students involved in the occupation warning that they were trespassing.
It had disabled elevators in the occupied building as well as student swipe cards allowing 24-hour access, protesters said.
The demonstrators are referring to the building as "Mahmoud Hall" in honour of Mahmoud Alnaouq, a Palestinian man killed in the Israel-Hamas war who was meant to study at the university.
Those at the University of Sydney have set up dozens of tents and vowed to continue their encampment, which they have have not ruled moving indoors.
The Sydney students held a forum on Friday and invited Vice-Chancellor Mark Scott, but he did not attend.
Deakin University in Melbourne has issued directives for students to leave and the Australian National University in Canberra has told students to leave the camp by the end of Friday.
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