The 23-year-old was arrested in his underwear at his residence in Seven Hills, in western Sydney, on Wednesday, almost six weeks after Chris Baghsarian's death.
The 85-year-old widower died after being abducted from his Sydney home before dawn on February 13 in a case of mistaken identity.
The arrested man was charged with aggravated kidnapping and murder.
"We'll allege he facilitated and recruited others to help in the kidnapping and detention of Mr Baghsarian," Detective Acting Superintendent Andrew Marks told reporters.
"We'll also allege he arranged people to dispose of Mr Baghsarian's body."
A search of the home allegedly uncovered a pistol, a dedicated encrypted communication device and a substantial amount of illicit drugs.
A woman, also 23, was arrested alongside the Seven Hills man but was not believed to be connected to Mr Baghsarian's death.
She was charged with breaching an apprehended violence order.
The arrests come nearly a month after two other men - Gerard Anthony Andrews, 29, and Daniel Stevens, 24 - were charged over their role in the incident.
Investigators believe Mr Baghsarian, 85, was killed at a makeshift stronghold in Dural, in Sydney's outer north, before his body was dumped on the night of February 14 near a golf club in Pitt Town, a 30-minute drive away.
His remains were found 10 days later.
Authorities believe the intended target for the abduction was a relative of Sydney businessman Dimitri Stepanyan, who lived on the same street as Mr Baghsarian.
Police suspected the businessman's relative was to be kidnapped in hope of a ransom being paid, with the kidnappers initially demanding $50 million.
The 23-year-old man is alleged to be visible in two sets of CCTV vision released by police, and is alleged to be seen with the torch on his phone lit in one clip.
Neither Andrews nor Stevens was believed to be shown in either piece of footage, and Det Supt Marks said half a dozen people could still be at large.
"We believe up to nine people were involved in this ... we will continue the investigation to identify (them)," he said.
The man arrested on Wednesday was not believed to be the very top of the hierarchy, but arranged multiple elements of the kidnapping, Det Supt Marks said.
Police allege he was present during the kidnapping and the transportation of Mr Baghsarian to the Dural stronghold and directed others to dispose of his body.
It is alleged the man is well-known to both police and one of the men arrested last month.
He is due to face court on Thursday morning.
Det Supt Marks urged people to contact police if they could help investigators identify any of the other people visible on CCTV.
Mr Baghsarian's family described the harrowing ordeal of the kidnapping as a nightmare, remembering him as a devoted father, brother, uncle and grandfather.
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