The man, 41, was helped from the Audi TT which had been driven at speed into Carr Mill reservoir in St Helens on Monday evening, Merseyside Police said.
Five officers were filmed rescuing him from the slowly sinking vehicle.
The man was found to be uninjured when taken to hospital. He was detained on suspicion of a number of offences.
These included the unauthorised taking of a motor vehicle, burglary, dangerous driving and failing to stop, police said.
Officers started tracking the suspected stolen Audi in Liverpool at about 20:20 GMT.
When police attempted to stop the car, the driver sped off, leading to a police pursuit up the M62.
Officers deployed a stop-stick before the Audi continued to be driven at speed and finally into the reservoir.
The officers who went into the water were also checked over as a precaution and have all been released.
Ch Supt Jon Ward said: "The officers involved in this pursuit and rescue acted with exceptional bravery, tenacity and professionalism to rescue the man on a bitterly cold, wet and miserable evening.
"Without a second thought given to their own safety and the conditions, they entered the freezing water and dragged him through the rear of the car just before it became completely submerged."
Helicopter footage of officers wading into icy waters to rescue a man who had driven a suspected stolen car into a reservoir has been released by police.