Armed police were called to a flat in Peacehaven this week following reports that a woman was being held at gun point.
Officers were dispatched to the scene at Beresford House in Trafalgar Close, just off Roderick Avenue on Thursday morning (January 2) at 9.24am.
Sussex Police said at 10.43am, a woman was brought out of the block of flats, followed by a man shortly afterwards at 11.10am.
The man has been arrested on suspicion of possessing an offensive weapon which police described as a knife.
Meanwhile the woman has been taken to a local police station to assist Sussex Police with their enquiries.
People gathered outside to watch but were held back by a cordon.
Superintendent Grenville Wilson from Sussex Police said: “We are confident that there is no danger to the public and the incident has been contained.
“The allegation has not been substantiated and following a search of the property, no firearm has been found.
“As a result, armed officers were stood down shortly after 11.30am.”