The man, Scott Henderson 22, has allegedly committed the crime of sexual activity in the presence of a child. After his arrest he was relieved of his duties as club mascot.
Part of Henderson’s duties was to appear as a mascot at home games, meeting lots of children and attending children’s parties.
It is understood the alleged victim is a 15-year-old boy.
A club spokesman said: “Blackburn Rovers can confirm that Scott Henderson has been advised that the club is no longer prepared to offer him any casual work.”
Lancashire Police said: "We can confirm that a 22-year-old man has been arrested on suspicion of sexual activity in the presence of a child.
"He was arrested at his home address and has been bailed until December 15, pending further inquiries."