Police snipers were called in and hundreds of people were evacuated from nearby buildings during the three-hour stand-off in Tottenham Court Road.
The man, named by Sky sources as Michael Green, entered a business premises at around midday.
He reportedly had gas canisters strapped to his body and threatened to ignite them.
The suspect was detained by police and officers have begun searching the premises.
Sky correspondent Mark White said: "We are assuming the man taken away by police is Michael Green, but it has not been confirmed.
"Witnesses at the scene said a man, who was shirtless, was led away by officers."
Speaking to journalists, Met Police Commander Mak Chishty said the 49-year-old suspect was "a local man". He is being held in police custody.
Responding to earlier reports that several people were being held hostage, Mr Chishty said no captives were inside the building when the man was taken away.
The suspect is reported to have stormed into Shropshire House, No 179 Tottenham Court Road, saying he had nothing to live for.
Police received an emergency call after computers, furniture and paper were thrown from the window of the fifth floor of the building.
Snipers, explosive experts and a police negotiator arrived on the scene amid the reports of hostages.
Sky's crime correspondent Martin Brunt said: "Police didn't have a very good view of this man and there were reports that he had gas canisters attached to his body.
"I think it was pretty quickly established that this wasn't a terrorist attack and as time went on police were able to open communications with the man and find out who he was and what he wanted.
"It was then I think that the sense of huge concern began to fall away."
The usually busy shopping area is still at a standstill.
Officers were concerned that the suspect had explosives or flammable materials and said a search of the building would continue until officers are sure it is safe to reopen it.
As the siege unfolded, hundreds of people were evacuated from surrounding buildings and Tube stations were closed.
Staff from news website the Huffington Post were among those evacuated.
Huffington Post UK executive editor Stephen Hull posted a video on Twitter of an office worker who said she saw the man enter the building.
Abby Baafi, 27, the head of training and operations at Advantage HGV, claimed the man had targeted her offices.
In a video posted on YouTube, she said: "He was specifically looking for me but I said 'My name's not Abby' and he let me go."
Sarah O'Meara, who also works for the Huffington Post, said they evacuated their offices in nearby Capper Street after being alerted by a woman who ran into the building.
"A woman ran in off the street saying 'There is a guy with a bomb and he is threatening to blow himself up' and that we needed to evacuate," she said.
Chris Vincent, who was in the building opposite Shropshire House, told Sky News: "We had heard a couple of loud bangs, they were pretty loud shocks.
"When I looked across I could see people throw things out of the window. It looked like three or four people were doing it.
"The road had been closed by that point. There was a big space where everything was landing."