The 30-year-old was part of a group hanging out under the square's socialist sculpture, Arbetets Ära, a popular meeting place.
“This other individual lifted up his hand to give the other man a light and then saw the butt of a pistol poking out of his trousers,” Mats Attin from the Malmö police told the Sydsvenskan newspaper. “Then he did what any good citizen should do. He rang 112 and reported what he had seen.”
Police used remote-controlled cameras in the square to zoom in on the suspect, sending pictures of him to officers patrolling nearby so that he could be arrested.
“The quality of the cameras is completely different nowadays and the pictures could be sent over to our telephones,” Attin said.
When the man was arrested, he was found to be carrying a loaded pistol, meaning he could be automatically detained. He faces up to two years in prison for firearms offences.
The man was on the scene of a murder in central Malmö last summer, and was prosecuted for refusing to give testimony. But was not found guilty by the court.
The arrest came on the same day that more than a hundred residents of the Malmö suburb of Oxie crowded into the local community centre for a meeting with police over the more than 20 recent arson attacks on local cars.