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The 36-year-old local man is suspected of approaching a woman at a cash point in Billingham Town Square.
After telling the woman, aged 42, he was armed with a knife, he attempted to take the money from her. However, she refused to hand it over and he walked away in the direction of Causeway.
Local operatives monitoring CCTV informed police. He was swiftly detained and arrested on suspicion of attempted robbery.
It occurred at approximately 4.35pm on Sunday 3 March.
Detective Inspector Carl Blenkinsop, from Stockton Police CID, said: “The actions of operatives monitoring the CCTV footage and then reporting it to police ensured we were quickly deployed to the area to arrest the man.
“He is now in custody waiting to be questioned.”
If anyone has any information that could further assist officers with their investigation please contact Cleveland Police on 101 quoting 039149.