The 28-year-old man has been held on conspiracy to commit murder following the deaths of PCs Fiona Bone, 32, and Nicola Hughes 23.
The latest arrest was revealed by Chief Constable Sir Peter Fahy as he thanked the public for their support.
Dale Cregan, 29, remains in custody on suspicion of their murders.
Sir Peter said over 25,000 messages of support had been left on an online condolence page set up by the force.
The unarmed police constables had been sent to investigate what appeared to be a routine burglary report in Abbey Gardens, Mottram, on Tuesday morning when they were attacked.
Sir Peter also revealed that the grenade used may have come from a batch of 12 devices from eastern Europe and they had not all been recovered.
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He said: "We have made it clear to our officers that the threat is still there.
"This has been a long-standing criminal feud between different outfits in Greater Manchester and the Tameside area."
He added: "There have been a lot of rumours and speculation, but I think in reality what we are talking about is a very small group who have been engaged in criminal conspiracy to harbour Dale Cregan."
The force confirmed one of the officers' Tasers was found on the ground out of its holster at the scene.
A gun used during the attack on PCs Bone and Hughes has been recovered.
The force has received over 19,000 messages on Facebook and over 1,000 on Twitter.
Sir Peter added he was impressed by the "great dignity" of the families of the two police officers killed in the attack.
He said: "Both families separately said their loved ones died doing the job they loved".
Detectives are continuing to question Mr Cregan, previously described as Manchester's most wanted man, over the deaths of PCs Hughes and Bone.
Earlier, police confirmed Mr Cregan was on bail over a fatal pub shooting in Greater Manchester earlier this year.
He had been freed because there had been insufficient evidence to charge him over the shooting of Mark Short, 23, at the Cotton Tree pub in Droylsden, on 25 May.
Mr Cregan was arrested when he walked into Hyde police station a short time after the shooting in Mottram on Tuesday.
He had also been the subject of a huge manhunt after the murder of David Short, 46, Mark Short's father. A £50,000 reward was offered for information leading to his arrest.
On 10 August, David Short was killed at his home in Folkestone Road East, Clayton, after describing his son's killers as cowards. He was found dead after an explosion was heard.
Home Secretary Theresa May is cutting her holiday short to travel to Manchester for a meeting with the chief constable.
The Queen has paid tribute to the two murdered police officers, the Lord-Lieutenant of Greater Manchester's office said.
It said: "In a letter to the Chief Constable of Greater Manchester, Sir Peter Fahy, Her Majesty expressed her sincere condolences to the families of PC Nicola Hughes and PC Fiona Bone at the tragic loss of their lives."
Earlier, a minute's silence for the officers was held across the force.
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