Wassouf “has been held in police custody since yesterday (Saturday) on drug charges,” a police officer in the western Stockholm district, Martin Holm, told AFP.
He was arrested after a police raid at a hotel in the Swedish capital, Holm said.
According to the online version of daily Aftonbladet, Wassouf, 46, was in possession of 30 grams of cocaine when he was arrested.
Holm would not comment on the report.
No formal charges have been pressed against Wassouf yet, and a prosecutor was to ask a Stockholm court to remand him in custody on Monday pending an investigation, Holm said.
According to Aftonbladet, thousands of people had bought tickets to see the singer perform at a newly opened venue in the Stockholm suburb of Solna.
Julieta Atanasova, 22, from the Swedish town of Norrköping, was one of them.
“We paid 2,000 kronor ($258) per person for a ticket. We’re disappointed,” she told the daily.
“A lot of people came a long way, even from other countries” to see the concert, she said.
Organizers told the paper ticket holders would be reimbursed.
Wassouf, who moved to Lebanon as a child, is a star in the Arab world with more than 30 albums to his name.