The incident took place in Meadowhall Road at around 4pm this afternoon.
Police have now confirmed the incident is not related to any counter-terrorism operations being carried out by the force.
BREAKING: Reports of armed police responding to incident near MeadowhallSuperintendent Simon Verrall said: “I want to offer my reassurance to the public, as I understand those in the vicinity at the time may have been alarmed by the increased police presence and activity in the area. However this is the standard protocol and response for an arrest of this suspected nature, and I want to offer my assurance there is no cause for concern and to confirm the arrest has no connection to any counter terrorism operations or offences.”
An eye witness has described witnessing police accosting a man during the incident.
They said: "From what I could tell the taxi had been stopped by two unmarked black X5s and armed police got out
"Smashed the car window when the driver didn't get out
"And then dragged both the driver and passenger out
"And took them to seperate areas
"[There were] four to five marked police vehicles that turned up very soon after."