Authorities arrested a 24-year-old man last night in Rusholme, an inner-city area of Manchester, it said in a statement.
"He was arrested on suspicion of offences contrary to the terrorism act," police added, AFP reported.
Twenty-two people, including seven children, were killed in the attack at a concert by US singer Ariana Grande.
The new arrest follows the evacuation on Friday afternoon of an area in Rusholme after police identified a car they said "may be significant to the investigation".
Seventeen arrests have so far been made in the UK and six people have since been released without charge.
Bomber Salman Abedi's father and brother are also in detention in Libya, where authorities say the two brothers were both part of the Daesh (also known as ISIL or ISIS) terrorist group which claimed responsibility for the attack.