The manhunt went on for two days after authorities found homemade explosives at his apartment in the eastern city of Chemnitz.
German police on Monday said they arrested a man suspected of plotting a bomb attack. Police identified him as 22-year-old Syrian refugee Jaber Albakr.
The suspect managed to evade the authorities on Saturday when they raided his apartment and found an "explosive substance more dangerous than TNT". Local media reported several hundred grammes of triacetone triperoxide or TATP, the same homemade explosive used by the Paris and Brussels attackers, was confiscated from Albakr's residence in Chemnitz.
NEWS: Tired but overjoyed: we captured the terror suspect last night in Leipzig— Polizei Sachsen (@PolizeiSachsen) October 10, 2016
"We've succeeded, really overjoyed: the terror suspect (Jaber) Albakr was arrested overnight in Leipzig," police said on Twitter about the 22-year-old.
Albakr had been in Germany since last year and was officially recognised as a refugee, police said at the weekend. He was believed to have had internet contact with DAESH, Sueddeutsche Zeitung reported.
Acting on a tip-off from Germany's domestic intelligence agency, police commandos had sought to swoop on the suspect early on Saturday at his apartment building. But he narrowly managed to escape, local media said.
He was finally caught in Leipzig, 85 kilometres from Chemnitz, after police learnt he had sought help from two Syrians, Spiegel Online reported.
Police subsequently arrested him in the early hours of Monday from the two Syrians' apartment.
One million asylum seekers and migrants entered the country in 2015. However, Germans have not been happy with Chancellor Angela Merkel's decision to allow them entry. In a study on migrants by the University of Leipzig released in 2016, four-fifths of the participants said Germany should not be so generous, and 60 per cent did not think asylum seekers were being persecuted in their home countries.