A 65-year-old dual citizen of Australia and Greece, who has been identified as Perry Kouroumblis, was arrested at an airport in Rome on Thursday evening, September 19 (AEST).
A charge and warrant was in place for his arrest.
He remains in custody, and Victoria Police will now work to seek his extradition to Victoria.
The arrest follows the murders of Suzanne Armstrong and Susan Bartlett, who were found dead in their Easey St home on January 13, 1977.
Both 27-year-old Suzanne and 28-year-old Susan had been stabbed a number of times.
The Armstrong and Bartlett families have released this statement:
For two quiet families from country Victoria it has always been impossible to comprehend the needless and violent manner in which Suzanne and Susan died.
The gravity of the circumstances surrounding their deaths changed our lives irrevocably.
We will be forever grateful for the support and understanding shown to us by our friends and family over the past 47 years.
It is difficult to sufficiently express our appreciation to Victoria Police and the many investigators who have tirelessly pursued answers and justice for us over such a long period of time.
The perseverance and dedication required to achieve the result today is something to truly behold.
For always giving us hope and never giving up, we simply say, thank you.
The pair, who went to school together in Benalla, had last been seen alive on the evening of January 10, 1977.
Suzanne’s 16-month-old son was left unharmed and was unattended in his cot when police located the women’s bodies.
Over the past four decades, a significant and tireless investigation into the murders has been conducted by detectives from the Homicide Squad.
In January 2017, police announced a $1 million reward for information leading to the arrest and conviction of anyone responsible for the deaths of the two women.
The investigation remains ongoing and further information will be provided as the matter progresses.
Anyone with information is urged to contact Crime Stoppers on 1800 333 000 or make a confidential report online at www.crimestoppersvic.com.au
Victorian Chief Commissioner Shane Patton said for over 47 years, detectives from the Homicide Squad had worked tirelessly to determine who was responsible for the deaths of the two women.
“The Easey St murders, as they came to be known, have always been a priority for Victoria Police and an enormous amount of work has been done by many, many people to bring us to the position we are in today,” he said.
“As well as the Homicide Squad, this includes a large number of police and staff from a range of specialist areas across the organisation.
“All have been wholly committed to finding answers and holding those responsible for these deaths to account.
“This was a crime that struck at the heart of our community — two women in their own home, where they should have felt their safest.
“While we still have some way to go, this arrest is an important breakthrough.
“I also want to recognise the enduring resilience of both the Armstrong and Bartlett families, who have grieved for over four decades and no doubt this will be a very emotional time for them.
“I hope this arrest brings you closer to the answers you so richly deserve and have waited so long for.”