The attack happened in the south western city of Reutlingen near a doner kebab stand in a bus station at Listplatz Square. German media have been reporting that the motive for the attack in the city south of Stuttgart was unclear.
Photos of the arrest show the man lying on the ground, with a bloodied face.
Armed police officers were seen standing above him, resting their boots on his body.
The motive behind the deadly attack remains unclear, according to Germany's Bild and Sueddeutsche Zeitung newspapers. The police said the suspect is a Syrian asylum seeker and that he may have acted alone.