Toronto police announced the arrest on Thursday, a day after releasing a photo of the suspect in the March 9 incident.
Police said a woman on board a southbound Line 1 train was approached by an unknown man who engaged her in a conversation.
The man then "became agitated" and allegedly produced a knife, police said. Fearing for her life, the woman quickly exited the subway train at Wilson Station.
The suspect, identified as 47-year-old Philip J. Fenton, was apprehended on Thursday morning and has been charged with weapons dangerous and assault with a weapon.
He is expected to appear in court via video on Friday morning. Police thanked the public for providing information that led to the arrest.
The incident is being investigated as a suspected hate-motivated offence, as investigators believe the victim was targeted because of her Muslim faith.