Hasnat Karim, a 47-year-old Briton, had initially been detained along with Tahmid Khan, 22, a University of Toronto student, as a suspect in the attack, which was claimed by the Islamic State group.
A court Saturday ordered Karim to be remanded in custody for eight more days after police said he was the "first person" to be formally arrested over the attack.
Karim and Khan were both inside the Holey Artisan Bakery when gunmen raided the cafe on the night of July 1, taking a group of mainly Western diners hostage and then killing 20 of them, along with two policemen.
Police had sought to hold Karim for 10 more days, saying the father of two should be questioned further as he was now the "first person to have been arrested in the case".
"We have found some information regarding his involvement in that incident," Dhaka Metropolitan Police spokesman Masudur Rahman told AFP.
Karim and Khan were last week arrested under a law which allows the police to detain someone on suspicion of any crime but they were not directly linked to the attack.
Karim's lawyer maintained he was innocent.
"We've said that he was a victim of circumstances. He was used as a body shield and forced to walk with the attackers at gunpoint," Golam Mostafa told AFP.
University of Toronto student Tahmid Hasib Khan (C) leaves after his court appearance in the Bangladesh capital Dhaka.
Khan was remanded into police custody for six days, police said.
Neither Karim and Khan have been seen in public since the end of the siege when commandos stormed the cafe in the capital's upmarket Gulshan neighbourhood on the morning of July 2.
The men's families have said they were being held by security forces even though there was no evidence to link them to the attackers.
Karim's father Rezaul Karim last week told AFP that his son had helped save lives during the siege.
"My son was a hero. He saved the life of at least eight people during the siege. I know him. He is innocent."
Relatives say Karim, his wife and two children were at the cafe to celebrate the 13th birthday of their daughter.
Reports in local media said both men were being investigated for suspicious activity during the siege. They said Khan was seen holding a firearm and Hasnat Karim strolling with the attackers on the roof.
Karim was a lecturer at the North-South University in Dhaka, where two of the five attackers who were gunned down at the end of the siege had studied.
Khan, who is a Bangladeshi citizen, was back in his homeland while on leave from the university.
Police earlier this week named a Canadian citizen, Tamim Chowdhury, as the attack's mastermind, offering a reward of up to $25,000 for information leading to his arrest.
The siege was by far the deadliest in a string of attacks claimed by Islamist groups which have blighted Bangladesh over the last three years.
British national Hasnat Karim leaves after his court appearance in the Bangladesh capital Dhaka.
Bangladeshi police have formally arrested a British national allegedly involved in the deadly Islamist attack on a Dhaka cafe that killed 22 people last month, officials said Saturday.
