The 18-year-old, a regular for England at youth level who has yet to break into the City first team, was involved in a crash on Manchester's Bury New Road at 10.15pm on Saturday night.
Ravel-Kaur Singh, 37, and her 32-year-old brother Kulwant Singh were killed instantly, while Ms Singh's two sons are in Hope Hospital.
Both sustained head injuries: that of the 16-year-old is not believed to be life-threatening while the 17-year-old remains in a critical condition.
The Manchester Evening News reported that Meppen-Walter's silver Mercedes was in a collision with the woman's red Nissan Micra. He has been arrested on suspicion of causing death by dangerous driving.
A 19-year-old man who was driving a grey Volkswagen golf has also been arrested on the same charge.
"This is a devastating tragedy for this family and also for the Greater Manchester community at large," said a spokesperson for Manchester City.
"Manchester City Football Club offers its heartfelt condolences to the family and all affected by the events of yesterdayevening.
"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."
- Kulwant Singh