Christopher Wild said Salman Abedi did not reply when he asked what was in his rucksack, and that he was then “fobbed off” when he tried to raise the alarm with a security guard.
A public inquiry was shown footage of Mr Wild going to speak to Abedi at 10.12pm, less than 20 minutes before the bombing on 22 May 2017.
Mr Wild and his partner Julie Whitley, who was seriously injured in the blast, were in the City Room waiting to collect his 14-year-old daughter and a friend.
The father told how they had arranged to meet at the top of the stairs to the mezzanine level, and that Ms Whitley “didn’t like the look” of a man sat behind a wall with a large bag.
“It’s a kids’ concert and why he should be sat there with a massive rucksack out of sight of everyone, it was just very strange,” Mr Wild said, while giving evidence via video link at Tuesday’s hearing.
“If he was a merchandiser he would be selling his things with the others.”
Mr Wild said the man now known to be Abedi appeared to be “keeping out of view”, which made him suspicious at a “kids’ concert”.
He said he feared that Abedi could be a danger to children or “let a bomb off” and he resolved to talk to him.
“I asked him what he was doing there and did he know how bad it looked, him sitting there out of sight of everybody,” he added.
In a witness statement, Mr Wild described how Abedi did not reply when he asked: “What have you got in your rucksack?”
“He just looked up at me,” he added. “I then said, ‘It doesn’t look very good, you know, what you see with bombs and such, you with a rucksack like this in a place like this, what are you doing?’”
Mr Wild said Abedi initially said he was “waiting for somebody”, but then in response to everything else “he just kept asking what the time was”.
The father said he did not know and walked away, saying the bomber seemed “on edge, nervous”.
The inquiry was shown CCTV of Mr Wild immediately walking down the stairs towards Mohammed Agha, a Showsec security guard.
Mr Wild said he informed the steward “about the guy with the rucksack hidden behind the wall”, and that he communicated his concern that Abedi was hiding and could be a bomber.
“He said he already knew about him and that was about it really,” he added. “I felt I was being fobbed off really.
“It was if he had more important things to deal with. But in no way do I blame him because the guy was already in there. There was nothing he could do.”
Mr Wild said that he and his partner do not wish Mr Agha to be blamed, and believe it was too late for an intervention once Abedi had entered the City Room.
He added that if he had seen a police officer, he would have reported the terrorist to them.
The inquiry previously heard that there were no police officers in the area for around half an hour before the blast, and that two had “just missed” Abedi’s arrival with the bomb after taking a two-hour dinner break.
A woman working on an anti-bootlegging operation at the concert said she reported Abedi to PC Jessica Bullough half an hour before the bombing, after seeing him “tucked away” and becoming suspicious.
On Monday, PC Bullough said she had no recollection of being approached, having Abedi pointed out to her or being directed to the mezzanine level, adding: “I’m confident that they didn’t happen.”
Sir John Saunders, a retired High Court judge, is leading the probe examining events before, during and after the attack.
In total, 22 victims were killed, 264 people were injured and 710 survivors have reported suffering from psychological trauma.