Melbourne's CBD was brought to a standstill on Friday night by protesters rallying over the death of Indigenous teenager Elijah Doughty in Western Australia.

Traffic and trams were brought to a halt by protesters, who staged a peaceful sit-in in the middle of the intersection of Flinders and Swanston streets, outside Flinders Street Station.

A ring of police, including officers on horseback, surrounded the protesters. 

Hundreds of demonstrators gathered on the steps of Parliament House on Spring Street at 4pm and took about an hour to march to Federation Square, disrupting peak-hour traffic on the way. 

Protesters leading the rally held a large banner that read: "Justice for Elijah."

Others held signs saying "black lives matter" and "leave our kids alone".

As the sun went down, protesters held a smoking ceremony. Some sang while one man played the didgeridoo.

The rally affected the city's busiest tram corridor, with spectators attending the Friday night AFL match between Hawthorn and Sydney urged to take trains to the MCG.

Elijah Doughty, 14, was hit and killed by a ute in the West Australian gold mining town of Kalgoorlie in August last year.

A 56-year-old man, whose name is suppressed, claimed the teenager had stolen his motorcycle. He said he saw the teenager riding the motorcycle and gave chase, later admitting he hit the boy. 

The man was charged with manslaughter, but last week was convicted of a lesser charge of dangerous driving causing death and sentenced to three years in prison.

The sentence sparked anger in the Kalgoorlie community that has echoed across the country, prompting a series of "Justice for Elijah" rallies.

Elijah's death has mobilised the Black Lives Matter movement in Australia.

The outcome of the case has been met by outrage from Aboriginal and Torres Strait Islanders, as well as many non-Indigenous Australians, who say it reflects Australia's systemic inequality. 

Thousands have taken to the streets in protest with rallies and vigils across Brisbane, Canberra and Western Australia in solidarity with Elijah's family and the community of Kalgoorlie. 

In Sydney, red ochre was smeared on the windows of the Supreme Court, as more than 200 people protested.

Growing tensions between police and Aboriginal people in Western Australia were captured in a powerful image of Elijah's cousin Hayley Garlett ​during a violent riot in Kalgoorie last year.

As hundreds of demonstrators pelted rocks and bottles at police officers, Ms Garlett held her arms up and attempted to stem the violence by standing between police and protesters.

She was lauded for her bravery as the image made headlines across Australia. 

- with Tom Cowie