The police, in a statement issued on Tuesday by its spokesperson, Mohammed Haruna, said the incident occurred at Runtum Village in Nabordo District of the state.
The statement indicated that the six-year-old boy was sent by his mother with the money to buy fire wood, when the suspect allegedly stabbed him on the neck and stomach.
The police said the victim was rushed to General Hospital, Toro, where he was certified dead by a doctor.
It said police detectives attached to Toro Division have visited the scene of the crime and arrested the suspect, who was helping them with their investigation.
The statement said the suspect would be charged to court as soon as the investigation was concluded.