Bidhya Sagar Das had been wanted by police in connection with an incident at a flat in Wilberforce Road, near Finsbury Park, north London.
Scotland Yard had said it was of “paramount importance” that 33-year-old Das be found following what was described as a “domestic incident”.
Both toddlers were discovered with critical injuries at the address last night (Saturday) and were taken to an east London hospital, where the boy died in the early hours of this morning
The incident led police to launch what soon became a murder investigation as well as a manhunt for Das.
Tonight Scotland Yard said a man had been arrested in the Hackney area at 7.15pm and was being held in custody at an east London police station.
Meanwhile, the injured girl remains in a critical condition and is receiving specialist medical care for her injuries.
Detective Chief Inspector Dave Whellams, of the Metropolitan Police, said: “This is clearly a tragic incident, and our thoughts are with the family of the two young children.
“Whilst we remain in the early stages of the investigation, a man has now been arrested.”
He said enquiries were continuing into the domestic incident but gave no further information on the circumstances.
Renewing an earlier appeal for witnesses, Det Chief Insp Whellams said: “I would still like to hear from anyone who may have any information regarding this terrible incident.”
Police are understood to have received a call from a “distraught” member of the public.
Witnesses heard a woman shouting for help on the street outside at 11.10pm last night and later saw two children being carried out of the property.
Mihai Manea, 29, who lives on the second floor of the three-storey building, said the children were twins and lived on the top floor with their Romanian mother and Indian father.
The father worked at the nearby Pembury Hotel as a receptionist, where Mr Manea also works, until a few days ago, he said.
A woman living opposite the building, who gave her name as Gui Gui, said she had heard a woman shouting late on Saturday night and opened the window to offer help.
“I was watching TV,” she said. “I heard someone was shouting.
“She kept on shouting. I do not know what she was shouting.
“I opened the window and I asked her ‘Can I help you, can I call the police for you?’
“She said: ‘My kids’.”
She later saw two young children being carried out of the building, with one held very close to a member of the emergency services.
Mr Manea described the mood inside the property as “really tense”, adding: “There’s police coming and going all the time.”
Neighbours said officers had been searching properties along the tree-lined street during today’s manhunt.
The National Police Air Service helicopter also assisted officers searching the Finsbury Park area.
Next of kin have been informed but formal identification and a post-mortem examination are yet to take place.