The dead included seven men, one woman and a 14-year-old boy, police confirmed, and two people were injured, although initially reporting seven injured.
According to the preliminary investigation, one of those injured was shot - while contradicts police's version that no firearms were used during their operation.
Partygoers said those police officers attacked them as they were dancing. A woman told Globo TV that she was hit with a bottle and beaten by police with a billy club as she was trying to flee.
The Sao Paulo Neighborhood Association denounced the police operation, called for an end to the violence and demanded justice so that “the culprits would be punished.”
“This morning, young people were trapped in side streets and were taken on the road to death, and those who should have been protecting (them) are creating more violence,” said the Paraisopolis Neighborhood Association in a statement on the social networks.
The police claimed that they were searching in the crowd two suspects after chasing them outside. They claimed they only used tear gas and fired rubber bullets as a response to an unwelcoming crowd.
The spokesman for the Sao Paulo Military Police, Emerson Massera, said that it was "too early to say if the Military Police made a mistake, because the people who caused this were the criminals.”
Rio de Janeiro funk dances – a musical style closely linked to the favelas in that city – are common in Brazil’s poorest neighborhoods and they draw thousands of young people to massive street parties all over the country.
These parties are the frequent target of police operations, given that law enforcement authorities say that the dances are just a cover for crime and drug trafficking.
“There are drugs, young girls are made pregnant, there’s sex, they also rob people ...” said Military Police commissioner Emiliano da Silva Neto, who called for the “uniting” of all security forces to “resolve that problem.”
The Paraisopolis Association, however, insisted that the funk dances are a place where people can enjoy themselves given “the lack of cultural opportunities."
“Paraisopolis and the (favelas) need social action to confront their difficulties. Instead of just addressing the problem, we need to prevent it,” it said.
Parasaopolis is an enormous favela where more than 55,000 people live and which is adjacent to one of Sao Paulo’s wealthiest neighborhoods.