The Italian news agency ANSA said the knife was discovered during an inspection of the bag as part of routine security for the public approaching the square.
The man, 52, from the southern Italian region of Calabria, is believed to be mentally disturbed and authorities said there was no suspicion of terrorism, ANSA reported.
Italian media said the man scuffled with police, and one officer was slightly injured.
Authorities were trying to determine why the man was carrying the.
The pope’s noon window appearance went ahead as scheduled, as he greeted some 20,000 people in the square during the customary Sunday tradition.