The incident happened around 10 p.m., PT on Friday, in the waterfront area around Bute Street and Thurlow Street.
Witnesses reported hearing what sounded like gunshots near Jack Poole Plaza.
A member of the Vancouver Police Department at the scene said the shots were actually non-lethal rounds, but wouldn't confirm how many were fired.
Police said three people were taken to hospital, with injuries that were not believed to be serious. It's unclear if the suspect received medical treatment after the arrest.
Tourists from Germany, who were walking along the Seawall, said a man with a knife tried to rob them, but appeared to be on drugs and got distracted before he could make off with any of their possessions.
Police had a section of walkway taped-off next to a Cactus Club restaurant. A small amount of blood could be seen on the pathway.