The 55-year-old man from Caroline Springs was arrested in the High Plains area, part of the Victorian Alps, yesterday.
He is being interviewed by police and no charges have been laid.
“Detectives from the Missing Persons Squad have arrested a man as part of the investigation into missing campers Russell Hill and Carol Clay,” police said in a statement.
“The 55-year-old Caroline Springs man was arrested about 5.30pm yesterday and will be interviewed by police this morning.
“The investigation into the matter remains ongoing.”
Despite numerous searches, the pair have never been found.
Detective Inspector Andrew Stamper earlier this month said a person may have been camping nearby, with Mr Hill not camping in the best spot on-site.
Mr Hill was an experienced camper who had a connection to the Gippsland region from his work there as a logger many years ago.
Police had released images and a sketch of a dark blue Nissan Patrol they had been searching for, but it is unknown if the car is linked to the arrest.
The high-profile missing campers case has captured the nation, with detectives earlier describing the complex investigation as piecing together a puzzle filled with ambiguity.
Mr Hill left his Drouin home on March 19 and picked up Ms Clay from her Pakenham home in his white Toyota Landcruiser.
Ms Clay told her friends she was heading away and was expecting to return home on March 28 or 29.
The pair then travelled via Licola, spending a night camping at Howitt High Plains, before heading into the Wonnangatta Valley on March 20.
Mr Hill was last heard from on March 20 via HF radio stating he was at Wonnangatta Valley in the Victorian Alps.
The pair were camping together at Wonnangatta River near the Wonnangatta camping ground.
Mr Hill purchased a DJI Mavic drone before the trip, which is yet to be recovered.
The pair’s campsite was found destroyed by fire near Dry River Creek Track on March 21.
Mr Hill’s Landcruiser had also sustained minor fire damage, prompting fears of foul play.
His daughters, Colleen and Debbie, in an emotional interview last month, said the thought of not knowing what happened to their father was like an endless loop of pain.
“It’s really hard, it’s not getting any better,” Debbie said.
“It’s just unknown. You can’t grieve for someone that you don’t know if they are really missing or dead, you are just stuck in the middle.
“You can’t really have a funeral – you don’t want to because then it’s saying they’ve definitely died.”
Debbie said she believed her father was dead, as she could not fathom him not contacting the family if he was still alive.
“If he was alive he would not not contact us,” she said.
“I really don’t think he could be alive. He wouldn’t hide.”
Ms Clay’s sister Jill said hearing about her sister’s disappearance came as a “terrible shock”.
She immediately knew something was “horribly wrong” as there had been no contact from her sister, and all their possessions at the campsite had been left abandoned.
“You just have this great sinking feeling,” she said.
The exact circumstances of the arrest are yet to be revealed.