The actor was arrested in the city's French Quarter on charges of both domestic abuse and disturbing the peace.
New Orleans Police spokesman Garry Flot has confirmed that Cage was seen engaging in a heated argument with his wife, Alice Kim, outside of their residence.
"[Nicolas Cage] and his wife were standing in front of a residence that he insisted was the property the couple was renting," Flot said, in a statement published by Reuters. "She disagreed and Cage grabbed her by the upper arm and pulled her to what he believed was the correct address."
Cage then allegedly began hitting vehicles near to him before attempting to get into a taxi cab.
A police officer close to the scene was quickly alerted to Cage's actions and made the arrest after noticing Cage's intoxicated state.
The Drive Angry 3D star has been married to third wife Kim since 2004, and the pair have a 5-year-old son named Kal-El together.
Cage's representatives have yet to comment on the situation.
Watch Cage in the trailer for his recent film Season of the Witch below: