A man, who has been named as Jesús Rivero Conchado, was stabbed in the chest during the fight, which broke out at around 2am on Saturday morning in the Galician town of Ferrol.
The party, which was attended by between 400 and 600 people was eventually broken up by local police, national police and officers from the Civil Guard.
The child's birthday party was celebrated by members of Galicia's gypsy community, according to local media, and included a musical performance by flamenco singer Sonia Prieto, known as La Húngara.
Rivero Conchado was taken to A Coruña's Complejo University Hospital where he later died, confirmed the city's mayor, Jorge Suárez.
According to regional newspaper La Voz de Galicia, the fight broke out when Rivero Conchado "pushed an older male guest" sparking a huge brawl between hundreds of attendees.
The fight ended with one fatality and dozens of injured from the throwing of glass bottles and other objects.
A huge police deployment was called to the scene, including two National Police and four local police patrols.
Police who arrived on the scene "feared for their lives" after being attacked by some of the people involved in the fight, according to La Voz de Galicia, and called for backup from the Civil Guard, which sent five more patrols.
Galicia's Gypsy Society issued a statement following the event, sending its condolences to the family of the victim and asking for "calm and peace to all those affected, directly or indirectly, by this terrible loss".
The statement added that, while murder is never justified, "alcohol and other substances enormously alter peoples' awareness, sometimes playing bad tricks".
There have currently been no arrests, but local police are investigating who struck the fatal blow.
Note: The Local has chosen to use the term gypsy (a translation of the Spanish word 'gitano') because the word itself doesn't have negative connotations for people within that community in Spain.