The man was believed to have a sword and two officers were injured when restraining the suspect.
Queen Elizabeth II was not in residence at her palace when the incident took place.
"Officers are on scene at the Mall outside Buckingham Palace. A man has been arrested on suspicion of GBH (grievous bodily harm) and assault on police," the Metropolitan Police said in on Twitter.
Pictures on social media show police cars and a police cordon surrounding the area.
Disclaimer: No Business Standard Journalist was involved in creation of this content