It happened around 7:30 p.m. Monday in the 300 block of Broadway, according to the Santa Monica Police Department.
Police identified the suspect in the stabbing as Sean Alexander Graves, 28, of Long Beach. He was booked on suspicion of murder and is being held on $2 million bail.
Officers responded to the scene on a report of a gunshot being fired and found a man with a stab wound to his neck, police said.
Paramedics took him to a hospital, where he died. His name and age were withheld, pending notification of his relatives.
"Officers learned an altercation between the victim and a male and female began near the Santa Monica Pier and ended up in the 300 block of Broadway where the victim was stabbed," police said in a statement.
"Witnesses who were with the victim provided a description of both subjects along with their last known direction of travel," police said. "At one point during this altercation, a shot was fired and a spent .45 (caliber) casing was located. However, it is unclear who fired that round."
Police detained Graves and a female who both "were identified by the witnesses as the subjects involved in the incident," police said.
Officers found a knife believed to have been used by the suspect, police said. The female who was with Graves was interviewed and released, police said.
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CNS contributed to this report.