Prosecutors have asked Libya to extradite him to the UK.
Salman Abedi, a 22-year-old Briton born to Libyan parents, blew himself up at the end of a show by US singer Ariana Grande in the deadliest militant attack in Britain for 12 years on May 22, 2017.
His victims included seven children while more than 500 were injured.
Assistant Chief Constable Russ Jackson, who is responsible for counter-terrorism in northwest England, said police had now applied for and been granted an arrest warrant for Abedi's younger brother Hashem for murder, attempted murder and conspiracy to cause an explosion.
"Hashem Abedi is currently detained in Libya and the CPS (Crown Prosecution Service) has now requested that Libyan authorities consider his extradition back to the United Kingdom," Jackson said. "We are grateful for the Libyan authorities considering this request."
PAPolice have issued an arrest warrant for the brother of the Manchester Suicide bomber
He added that detectives had not found any evidence of the involvement of any wider network.
Islamic State said it was responsible in the immediate aftermath of the bombing but security services have always treated the claim with scepticism.
Days after the attack Libyan counter-terrorism investigators arrested Hashem Abedi and the brothers' father Ramadan.
In June, the Special Deterrence Force (Rada), a counter-terrorism force aligned with the UN-backed government