The arrest comes after an initial police investigation in 1989 concluded the 27-year-old American mathematician had committed suicide.
The body of Mr Johnson was found at the base of a cliff at Blue Fish Point on the morning of Saturday, December 10 1988.
A second inquest in June 2012 returning an open finding.
The matter was referred for a third inquest and, in 2017, the then-NSW Coroner Michael Barnes found that Mr Johnson fell from the cliff top as a result of a “gay-hate attack”.
Following the inquest, NSW Police Commissioner Mick Fuller met with Scott’s brother, Steve Johnson, to discuss the case.
A specialist team of detectives under Strike Force Welsford were then selected to investigate the circumstances surrounding Mr Johnson’s death.
In March lead investigator Detective Chief Inspector Peter Yeomans confirmed the investigations had narrowed in on a “particular individual” after a $1 million reward was offered in 2018.
The amount was then increased to $2 million in March when Steve agreed to match it.
The Strike Force Welsford detectives arrested a 49-year-old man at Lane Cove about 8.30 this morning. A search warrant was then executed at a nearby home.
The man has been taken to Chatswood Police Station and charges are expected to be laid later today.
Police have also begun a forensic search at North Head this morning, which they expect to complete in a number of hours.
Comm Fuller said he had personally notified Steve, who lives in the US, of today’s developments.
“Making that phone call this morning is a career highlight – Steve has fought so hard for so many years, and it has been an honour to be part of his fight for justice,” the Comm said.
“While we have a long way to go in the legal process, it must be acknowledged that if it wasn’t for the determination of the Johnson family, which inspired me and the Strike Force Welsford team – led by Detective Chief Inspector Peter Yeomans, we wouldn’t be where we are today.”