The man, 47, was taken into custody in Hobartville, about 20km from the crime scene in Werrington in Sydney's outer west on Monday evening.
He was refused bail to appear in Penrith Local Court on Tuesday.
The 47-year-old woman, identified as Leanne Akrap, was found on Sunday in the reserve.
She was discovered lying next to clothing and rubbish.
Police had established two crime scenes after officers were called to the reserve off Irwin Street at Werrington.
Forensic teams were on the site on Monday examining the area, which is near sporting fields and homes, and checking bins on the street for clues.
They also searched the unit about 500m away from where the body was found.
A passer-by discovered her body.
"It appears as though that body has been there for a period of time without discovery," Detective Superintendent Trent King said.
The cause of death has not yet been revealed by NSW Police.
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