French news channel BFMTV reported earlier that a auto "deliberately" rammed into a group of students in front a business school in Balgnac, near Toulouse, on Friday, injuring three students.
Police said they were looking into his psychiatric history after he told officers as they arrested him he heard voices telling him to hurt someone, local media said.
All three of the victims, one woman and two men, are said to be in their early 20s.
Three of the school's students, reportedly Chinese nationals, sustained injuries during the incident.More news: MOP issue can not be heard in open court, says Supreme Court
More news: Obama heads to downtown Chicago for jury duty
More news: Facebook Wants You To Upload Nudes Of Yourself To Stop Revenge Porn
The attack occurred in front of the Blagnac campus of the Institute for Social Research, an AFP journalist said.
The driver, a 28-year-old man who was known to police for committing minor offenses, was arrested at the scene, polices sources said.
Toulouse Mayor Jean-Luc Moudenc tweeted (in French): "Very shocked by the aggression towards the students in Blagnac".
The students are said to be aged 22 and 23. He offered support to the injured students and their families. It is not clear as of now whether it is a terrorist attack or not.