Germany's federal crime office said in a statement the suspect is a 24-year-old German citizen who was detained in his home in the northern county of Wesermarsch in Lower Saxony on Monday. His apartment was searched and evidence seized.
The man was a close acquaintance of the victim, a 4-year-old German girl, the statement said.
Prosecutors have said the girl was severely sexually assaulted multiple times between October 2016 and July 2017.
The abuse was filmed and photographed by the suspect, who then distributed the images on a child pornography platform on the so-called "darknet", a restricted access computer network often used by criminals.
The federal crime office thanked the public for "great support in their public search" for the man and asked everyone to delete pictures of the girl.