Police angered at plans to limit their pay burned tyres in the streets of Quito, while witnesses described seeing looting across the city.
Scores of soldiers swarmed over the landing strip of the international airport in the capital to quell the trouble.
Security Minister Miguel Carvajal said a state of emergency had been declared and described the uprising as an attempted coup.
He added that the military would now take over the functions of police taking part in the rebellion.
All international flights had been cancelled after troops exerted a shutdown in confused and chaotic scenes.
The Peruvian President has ordered the immediate closure of his country’s border with Ecuador due to the unrest.
Correa was hurt as he took to the streets to confront the protesters in the capital.
He has become a figure of hatred as he considers drastic action while battling members of his own party in a deadlocked Congress.
The left-wing leader is believed to be planning to dissolve the legislature after his proposals aimed at slashing state costs were blocked.
The move, which adheres to the updated constitution passed only two years ago, would allow him to rule by decree until new presidential and parliamentary elections can be held.
Although scenes of unrest and political instability are common within the country, they are the first President Correa has faced since taking power.
Workers and school children in the city of Guayaquil were also sent home during the trouble, which the country’s foreign minster claimed was orchestrated by “ill-informed” police.
Street protests toppled three presidents during economic turmoil in the decade before he assumed office. Sky News