Worried residents of the Pasteur neighbourhood in Nice called police around 8pm on Wednesday after hearing gunfire in the streets below.
Officers were unable to find any aggressors at the scene, but deployed “significant resources” to carry out a manhunt, reported the Nice Matin newspaper.
Eventually officers found a man who appeared to be armed with a handgun, although it later turned out to be a non-lethal gas pistol.
The man and the officers exchanged fire, reported the paper, before the police were able to neutralize the man and arrest him at around midnight.
There have been no reports of any injuries.
The man, who was said to be extremely drunk, was taken into custody and police have launched an investigation.
While the man's motives remain unclear at this point, his drunken actions come at a sensitive time for the locals, who are no doubt still on edge after a man drove a truck through a crowd of Bastille Day revellers, killing 86.
There memorial for the victims and the 650 people who were injured in the attack was due to take place in Nice on Friday but the bad weather forecast has forced authorities to postpone it until Saturday.
President Francois Hollande will be on hand to speak at the ceremony, which will be held near the scene of the attack.