"He has been detained since 8 pm (Thursday). He is accused of crimes related to the accident," said Jaime Iglesias, the chief of police in the northwestern region of Galicia where the accident happened.
Asked at a news conference in Santiago de Compostela why the driver was being detained, Iglesias said: "For recklessness".
The driver who, according to state train company Renfe has more than a decade of train driving experience, has not yet been charged with a crime and police are still waiting to question him.
This driver was unable to break in time and thus prevent the accident, newspaper El Pais reported on Friday.
The investigation into the cause of the nation's deadliest rail disaster since 1944 has focused on a possible problem with the brakes and speeding by the driver, the newspaper said.
The accident happened Wednesday evening as the train entered a sharp curve known as "A Gandeira" about four kilometres (2.5 miles) from the station in the northern city of Santiago de Compostela.
The train was reportedly travelling at twice the limit on a section of high-speed track that has a speed limit of 80kph (50 mph).
"The railway warning systems detected that the driver of the Alvia train that departed Madrid, was travelling at 190kph when it should not exceed 80," El Pais wrote.
"The driver acknowledged that the alarm went off in the control panel and he tried to brake but was not able to avert the tragedy," the newspaper added.
El Pais said Thursday that the driver stated immediately after the crash that he had been travelling at 190 km/h at the time of the derailment.
"I hope no one died because it will weigh on my conscience," he reportedly told supervisors over the radio while trapped inside the cab after the eight-carriage train derailed.
He is in hospital under police surveillance as he undergoes treatment for light injuries sustained in the accident.