Elizabeth Street was closed between Bourke and Little Collins Streets for almost two hours while the fire brigade removed the rest of the window.John Ladelfa, who works at the shop underneath the building, was serving a customer when he heard the window fall.
"People just basically saying ... screaming out, get out of the way, because there was lots of glass coming down," he said.
"It looks like someone had physically put their hand through and just chunks of glass coming down and shattering on the footpath and on the road."
Police have now reopened the closed area of the street.
The cause of the incident has not been established and no one was injured.
Shopkeeper Amanda Muscat saw glass falling from the window for half an hour before emergency services arrived.
"I was a bit concerned because there was cars driving up and there were cars parked there and the majority of people had scattered themselves in both directions and and the trams were still passing by," she said.