The senator had drawn widespread condemnation for his remarks after 49 were killed in the attacks on two Christchurch mosques by Australia-born terrorist Brenton Tarrant.
Australian media reported that Victoria police arrested a 17-year-old male from Melbourne's Hampton suburb after he "allegedly threw an egg at a 69-year-old Brisbane man" at an address this afternoon, The Straits Times reported.
The teenager has been released pending further enquiries, national media outlet Nine News said.
In footage from the incident posted to news site News.com.au, the youth smashes the egg against the side of Mr Anning's head while filming the incident on his phone.
Much of the egg bursts upon contact, and what remains of it trickles down the senator's head, leaving a wet mess on his shirt.
The senator turns, swears and retaliates by hitting the youth's face before he is restrained by a man nearby.
Other onlookers, presumably supporters of the senator, tackle the teen to the ground and pin him down.
Several sites, including 10 News First Melbourne and Junkee, have described the teenager as a protester.
It is not known if Mr Anning will be charged.
Queensland senator Fraser Anning had been in Melbourne to meet supporters of his new Conservative National Party, news site Junkee reported.
In a statement released just hours after the attack, Mr Anning condemned the self-professed fascist but said that "usually (Muslims) are the perpetrators".
"The real cause of bloodshed on New Zealand streets today is the immigration program which allowed Muslim fanatics to migrate to New Zealand in the first place," the senator from Australia's Queensland said.
Singapore's Home Affairs and Law Minister K. Shanmugam said that the comments by senator Fraser Anning described Islam as a violent, fascist religion promoting savage beliefs.
The senator also attacked the Prophet and blamed Muslim immigration for the massacre, Mr Shanmugam added in the Facebook post on Friday night.
"The senator's statement is sickening. It is completely unacceptable. And he issued it when people are grieving," he said.
Australian politicians have also denounced his remarks. Prime Minister Scott Morrison said that the remarks were "disgusting".
"Those views have no place in Australia, let alone the Australian Parliament," he said in a Facebook post.
Similarly, former Prime Minister Malcolm Turnbull described Mr Anning's as "contemptible", and called him a "disgrace to the Senate".
"By spreading hatred and turning Australians against each other he is doing exactly what the terrorists want," he said on Twitter.