The 18-year-old was held following a collision between a silver Mercedes and a red Nissan that left a 32-year-old man and a 37-year-old woman dead. A second man, driving a grey Volkswagen, was also arrested following the incident.
A spokeswoman for Manchester City said: "It is a devastating tragedy for this family and also for the Greater Manchester community at large. Manchester City football club offers its heartfelt condolences to the family and all affected by the events of yesterday evening.
"The situation is subject to an extensive investigation by Greater Manchester police and therefore we are unable to make specific comment on the incident itself at this time."
Meppen-Walter joined City in July, 2010 and is a regular for the England Under-17 team.