The man remained in custody on Thursday evening. Police would only say that their inquiries into the incident were continuing.
It is understood the 18-year-old has a history of mental illness.
The incident occurred two days after Islamic State issued a vicious and detailed call to “lone wolf” followers to stab, shoot, poison and run over Australians at iconic attractions.
The Sydney Opera House was one of those attractions mentioned in the first edition of the new Islamic State magazine Rumiyah.