A young man was left with serious knife wounds after the altercation and the man in being held on suspicion of aggravated assault.
"There was an altercation in Tuve and someone has been stabbed. It turned out later that a Gothia Cup coach is in police custody in connection with the incident," said Peter Pettersson Kymmer, Gothia's press officer, to the TT news agency.
The coach's team has left the cup and gone home, Pettersson Kymmer said.
"A fight broke out between two adolescents, during the brawl a person was stabbed near the collarbone or in the torso with a knife. And has thus sustained a serious knife injury," said Ulla Brehm at Västra Götaland police to the local Göteborgs Posten daily.
Dennis Andersson, General Secretary of the Gothia Cup, stated in a press release that he is "appalled, disappointed and saddened" by the incident.
"During the 40 years of the Gothia Cup and over one million visitors, this is the most serious incident," he wrote.
The Gothia Cup football tournament, also known as The World Youth Cup, is organized by Gothenburg top flight club BK Häcken and since its humble beginnings in 1975 with 275 participating teams, it has grown to become the largest youth football team in the world.
The 2014 cup has attracted over 1,600 teams from some 80 nations.