Seven other men are in custody in connection with Monday’s blast, all are being held on suspicion of offenses violating the Terrorism Act. Their ages ranged from 18 to 38.
A 16-year-old boy had been arrested was released without charge, police said.
Britain’s security level has been upgraded to “critical” meaning officials believe another attack may be imminent.
Authorities are chasing possible links between the bomber, Salman Abedi, and militants in Manchester, elsewhere in Europe, and in North Africa and the Middle East.
Abedi, a college dropout who had grown up in the Manchester area, was known to security services because of his radical views. He was the son of Libyan parents who migrated to Britain in the early 1990s.
He reportedly was in contact with family members just before the attack.
The name of the man arrested in the early hours Friday and those of the seven others in custody were not released. No one has yet been charged in the bombing.