The hostage-taker, a German man aged around 20, had originally demanded €1 million and a safe getaway, according to the Bild newspaper website.
However after several hours of negotiations he agreed to release the bank employee, police said.
Police then entered the Deutsche Bank branch in southwest Berlin's Zehlendorf district, and arrested the suspect who put up no resistance.
The unidentified assailant had taken the bank employee hostage in the German capital on Friday afternoon just before the branch was due to close for the day.
Around 20 other employees were inside the bank at the time and managed to get to an upper floor where they were not seen by the hostage-taker. They were able to escape swiftly through a side door.
The hostage drama ended hours later, shortly after one in the morning on Saturday.
Some reports said the man claimed to have explosives in a case, but police did not confirm or deny that information.
The freed hostage was safe and well and would be given psychological support, the police spokesman said. Deutsche Bank is Germany's biggest lender.