Swedish police also arrested a second suspect in Friday's truck ramming. No group has yet claimed responsibility.
Sweden will mark a minute of silence on Monday to honor the victims of a truck attack in Stockholm that killed four and wounded over a dozen last week. Swedish Prime Minister Stefan Lofven, the royal family and other senior officials will lead the observance.
Thousands gathered in the spring sunshine on Sunday in Stockholm near the site of Friday's attack to show support for those killed or injured when a hijacked beer delivery truck hurtled down a busy shopping street before crashing into a store and catching fire. The Uzbek suspect was arrested several hours later.
Police said the suspect had expressed sympathy for Daesh and was wanted for failing to comply with a deportation order. Police declined to give his name, as did the suspect's court-appointed lawyer. Police have arrested a second suspect on a lower degree of suspicion.
"The suspect had expressed sympathy for extremist organisations, among them IS [Daesh]," Jonas Hysing, chief of national police operations said.
The suspect, aged 39, from the Central Asian republic of Uzbekistan, applied for permanent residence in Sweden in 2014. However, his bid was rejected and he was wanted for disregarding a deportation order, Hysing said.
Security Police spokesperson Simon Bynert said the suspect had been involved in an asylum process in Sweden, but that the security police had not been part of it.
Police had been looking for him since Sweden's Migration Agency in December gave him four weeks to leave, but security services had not viewed him as a militant threat.
Sweden's prosecution authority said a second person had been arrested on suspicion of having committed a terrorist offence through murder, but police said they were more convinced than ever that the Uzbek man was the driver of the truck.
"Police have arrested a person and we have appointed a public defender," Helga Hullmann, judge at the Stockholm District Court said.
Another five people were being held for questioning after raids and police said they had conducted about 500 interviews.
Police across the Nordic region went on heightened alert after the attack, and in neighbouring Norway police set off a controlled explosion of a "bomb-like device" in central Oslo on Sunday and took a suspect into custody.
Swedish police said they have conducted 500 interviews so far.
Atack an echo from Nice, Berlin and London
Two of those killed were Swedes, one was a British citizen and the other was from Belgium, Hysing said of the attack, which echoes the earlier use of vehicles as deadly weapons in Nice, Berlin and London.
Those attacks were claimed by Daesh, but there has been no such claim yet for the Stockholm assault.