The police's action on Wednesday came at the end of a massive, otherwise peaceful march demanding sweeping education reform.
Hooded protesters smashed windows and threw Molotov cocktails at police and for a time halted traffic on Avenida Alameda, a main city thoroughfare.
Santiago governor Jose Antonio Peribonio said that police arrested 98 protesters, most of them involved in the violent rioting.
Ten other people were earlier arrested and accused of setting up makeshift barricades that were set ablaze and blocked roads across the city, snarling the morning commute.
Organisers said that nearly 100 000 people marched in the Santiago demostration.
Separately, labour union members said they blocked access to several state-run mines in northern and southern Chile to sympathise with the protesters and air their own grievances.
"The struggle for our rights has stopped being just about students," said Andres Fielbaum, head of the University of Chile's student federation, who said he was "extremely happy" by the protest turnout.
'Criminals and extremists'
​Interior and Security Minister Andres Chadwick however drew a hard line.
"These are not students, they are criminals, extremists and violent people who in this case have acted in a simultaneous, coordinated and prepared way," he said.
President Sebastian Pinera announced that he would send to congress a bill that would let police arrest protesters before they have engaged in violence.
Since 2011 Chilean students and their supporters have rallied in the streets, calling for reform to the South American nation's education system, considered expensive, inefficient and inequitable.
Public education in Chile suffered from sharp cuts in funding during the 1973-1990 dictatorship of Augusto Pinochet, leaving a system that favours expensive private schools that are out of the reach of the poor. – AFP