The unnamed 24-year-old man has been detained on suspicion that his negligence led to the accident, said the regional police service. Prosecutors are now examining whether to file a request to remand him in custody.
A commuter service late Monday rammed into a parked freight train just a few hundred metres from Aichach station, in southern Bavaria.
The Deutsche Bahn network operator said that a commuter service hit a freight train between Ingolstadt and Augsburg near Aichach station in the country's southern Bavaria region.
"There are some seriously injured and others only lightly," a Deutsche Bahn spokesman told the German DPA press agency.
German police said that a total of 14 people were hurt.
According to a police spokesman, The 37-year-old train driver and a 73-year-old female passenger were killed.
The company did not immediately provide additional details into the possible causes of the collision.
Shortly after the accident a spokesperson said the two trains had not derailed.
The passenger train which had almost 20 people on board had driven toward the still, empty freight train and jammed into it. How fast the passenger train was going could not be clarified late on Monday.
It was also unclear whether signals or switches were possibly set incorrectly.
The Ingolstadt-Augsburg train route has since been closed.
The closure around Aichach station will last at least until Tuesday afternoon. No long-distance trains run through this station, but rather, only regional and freight trains.
The collision brought back memories of a horrific train crash which happened in February 2016, when two trains collided in Bavaria. Nine passengers were killed and around 80 more were injured.