The demonstrations took place in Nicaragua's city of Juigalpa on Saturday.
The protesters, mainly farmers from local villages, through which the construction will pass, feared that the construction will have huge environmental impact and force thousands off their land as authorities plan to seize rural properties, according to the BBC.
The protesters also accused Nicaraguan President Daniel Ortega of "selling the country to the Chinese," according to the broadcaster. Nicaragua's government argues the canal will bring vital investment to one of Central America's poorest countries.
Nicaragua began building the $50-billion dollar canal on December 22, 2014. The private Hong Kong Nicaragua Canal Development (HKCD) Group was commissioned to complete the ambitious project within five years.
The new canal is set to be longer and wider than the Panama Canal. The HKCD was granted a 50-year concession to manage the project, with a possible extension for another 50 years, after the construction is completed.