Currently only one child is thought to be a victim, although police said the investigation is only beginning to unfold and further incidents may arise. The case is being investigated by the family violence unit of the Malmö police.
A child's parents contacted the preschool head last Thursday with a hunch that something was amiss.
"We immediately reported it to the police," school head Ingegerd Ekström told newspaper Expressen.
On Monday morning the suspect was arrested awaiting investigation, and parents of children at the school were informed of the situation.
The preschool has remained open, and during the week professional psychologists will be at the school.
The revelations echo a similar case from a separate day care centre in southern Sweden where a man in his early twenties confessed to molesting and raping several children. The man was hired as an intern at the time of the assaults.