The 23-year-old was held on suspicion of terror offences at an address in Shorehan-by-Sea, Greater Manchester Police said.
He is the 16th person to be arrested in connection with the attack, which killed 22 people and injured more than 100.
Violet Mainda, who owns a hairdresser’s salon beneath the flat where he was arrested, said she believed the man who lives there was training or had trained to be a pilot, She added: “He was a normal bloke, very jovial.”
Ms. Mainda told the Daily Mail: “He was a young Libyan guy who was always very jovial and nice.
“He said he was training to be a pilot at Shoreham Airfield and he had just completed doing that. I am really, really shocked by this. I can’t believe he had been arrested.
“He had a few friends and a girlfriend and always seemed very nice. I don’t know if he worked, I think he just studied to be a pilot. He said he was studying to become a pilot at Shoreham.”
She added: “He told me he came from Libya. He must have been here more than a year and he was always jovial.”
Source: News Now/ Belfast Telegraph