"The man, aged in his late twenties, was arrested on suspicion of possession of an offensive weapon and on suspicion of the commission, preparation and instigation of acts of terrorism. Knives have been recovered from him."
The man, aged in his late 20s, was arrested by armed officers on Parliament Street, a stone's throw from the UK parliament building and Prime Minister Theresa May's official Downing Street residence.
No one was injured in the incident, police said and May's spokesman said the prime minister was not at Downing Street at the time of the incident.
The incident comes just over a month after a British-born convert to Islam ploughed a car into pedestrians on nearby Westminster Bridge killing four people before stabbing to death a police officer in the grounds of parliament.
Reuters pictures showed police officers standing by at least two knives lying on the ground.
Armed officers sealed off the area. A Reuters reporter and photographer saw police detaining a dark-skinned, bearded man dressed in a hooded, black coat.
His right hand appeared to have a bandage wrapped around it.
Police said the man was being held at a south London police station.
"Detectives from the Counter Terrorism Command are continuing their investigation, and as a result of this arrest there is no immediate known threat," the police statement said.
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