The paramedic had been catching up with colleagues and ordering a coffee when he was allegedly attacked from behind at a cafe at Reservoir, in Melbourne's north, just after 11am on Thursday.
Investigators allege a man got out of a small, red car and stabbed the paramedic before fleeing in the vehicle.
The suspect, a 32-year-old man, was arrested at a nearby property just before 1pm.
He has been taken into custody and is being questioned by detectives.
The paramedic, who recently became a father, was taken to hospital with serious but non-life-threatening injuries.
Ambulance Victoria chief executive Jordan Emery thanked a bystander who ran in to intervene during the attack, attempting to pull the offender away from the paramedic.
"I thank that person from the bottom of my heart for having the courage to step in and take action and care for our paramedic," Mr Emery said.
"From my short discussion with him, he was relieved that that person intervened. He remarked that he thinks that probably stopped him being more seriously injured, potentially stabbed more times."
Victorian Ambulance Union secretary Danny Hill told reporters on Thursday he feared the worst when he received the call informing him about the attack.
He described the incident as a "vile and chilling" attack.
"These people are here to save your life; they are there to deliver expert, world-class care to you in your time of need," Mr Hill said.
"When they're treated like this, when they are abused, when they are threatened, when they are disrespected, when they are spat on, you are actually limiting the care they can provide to your loved ones and to the community."
Victoria implemented laws in October 2018 to mandate a six-month jail term for injuring emergency workers, unless there were "special reasons".
The laws were later tightened after James Haberfield, 22, avoided a prison term despite admitting to attacking a paramedic at a musical festival while on a cocktail of drugs.
Haberfield was ordered to serve an 18-month community corrections order and undergo treatment for schizophrenia, which he suffered at the time of the attack.
Under the change, if a person's mental state was self-induced by alcohol or drug use, they could not rely on the "special reasons" clause.
Attacks on paramedics should never happen, opposition health spokeswoman Georgie Crozier said.
"It just demonstrates how unsafe our community is and how rampant crime in Victoria is," she said.
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