The 19-year-old man was arrested at Liverpool John Lennon Airport on Friday on suspicion of offences contrary to the Terrorism Act and remains in custody, Greater Manchester Police said.
A property on Thelwall Avenue in Fallowfield is being searched as part of the investigation.
Police said, as it stands, 23 people have been arrested in connection with the investigation, of which two were quickly de-arrested, and 20 were released without charge.
Anti-terror officers have already said police suspect suicide bomber Salman Abedi did not act alone and detectives want to speak to his brother in Libya.
Detective Chief Superintendent Russ Jackson, head of the North West Counter Terrorism Unit (NWCTU), said on Thursday that while detectives do not now think Abedi was part of a large network, they do suspect the involvement of others in the attack which had been planned for months.
He said officers were "engaged" with the authorities in war-torn Libya where Abedi’s brother, Hashem, is currently being held.
Mr Jackson said: "We don’t have evidence of a large network. We do however suspect others were either aware or complicit in the knowledge of this attack."
And he did not rule out further arrests.
Abedi killed 22 people when he detonated a bomb in the foyer of Manchester Arena at the end of an Ariane Grande concert on May 22.