NSW Police arrested a 27-year-old man on Thursday afternoon who is believed to have fled a car in which officers later found a dead body.
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Officers investigating the death of the woman confirmed the arrest at 4.45pm before he was taken to Batemans Bay police station.
The man was arrested in the same area where a major search had taken place earlier in the day, involving two helicopters and the police tactical response unit.
The 27-year-old was reportedly arrested after a Channel 7 cameraman spotted him hiding in nearby bushland.
The body of the woman - who police believe is missing Canberran Daniela D'Addario, 35 - was found in the car's boot after officers stopped the blue Hyundai Getz with ACT registration plates on the Tathra Bermagui Road at Cuttagee Point about 8.30pm on Wednesday.
Police said a man ran from the car, escaping into bushland near Bermagui, when police stopped it. Officers spent about 14 hours looking for the man before calling off the search.
Ms D'Addario, 35, was reported missing earlier this week along with Canberra man Josaia (Joey) Vosikata, 27.
Far South Coast police commander, Detective Superintendent Peter O'Brien, said police had been looking for the vehicle at the request of ACT Policing.
"We believe there may have been some sort of domestic relationship that had soured, as a result of that information we were on the look out for that vehicle," he said.
He said officers had chased the man who ran from the car, however, the weather, darkness and terrain meant he had been able to escape.
Superintendent O'Brien did not reveal the victim's name, nor provide details of how the woman died.
"At this stage it is far too early to say how the woman became deceased, however that should come to light after she is examined by the coroner," he said.
Concerned family members of Ms D'Addario, who was a teacher at Canberra High School in 2009, reported her missing on Monday when they were unable to get in touch with her at the weekend.
ACT police said on Wednesday that Mr Vosikata and Ms D'Addario could have been heading to the Bermagui area in Ms D'Addario's silver or light blue Hyundai Getz.
- with Megan Levy, Emma Kelly and the Bay Post
