The driver fled the scene of the incident, at a busy junction in the north of the Canadian city, but was arrested several streets away.
The arrest followed a tense standoff with officers on the street.
Bystander videos appeared to show the driver pointing an object at the officers, who can be heard shouting at him to get down.
The man was then detained without any shots being fired.
Toronto deputy police chief Peter Yuen asked for witnesses to come forward and said there would be "a long investigation".
