Footage shared on social media, including Snapchat and YouTube, shows a boy in a group outside the Somers Town Hub in Portsmouth.
The video shows the boy, wearing a hoodie and face mask, outside the building with the large knife.
Several boys’ voices can be heard shouting ‘why you running?’ to someone not caught in shot.
Hampshire police confirmed they have now arrested a 12-year-old boy.
It comes after they were informed of the May 1 incident.
The boy is under investigation for threatening a person with a knife.
A police spokeswoman said: ‘We received a report on Saturday 1 May of a boy seen holding a knife in Portsmouth.
‘Officers arrested a 12-year-old boy from Portsmouth on the same day on suspicion of threatening a person with a blade/sharply pointed article in a public place.
‘He has been released under investigation while our enquiries continue.
‘We understand that members of the public may be concerned about this incident, however we would like to reassure our communities that we take all reports of this nature very seriously and are working to establish the exact circumstances of this incident.
‘If you have any concerns do come and speak to one of our patrolling officers.’