A 33-year-old Sydney man was arrested and charged on Saturday over the murder of Collisson, who had previously spent more than two decades on jail.
Collisson, 53, was reported missing on October 15 after he was last seen at a property in Menah, northwest of Mudgee in NSW.
It's believed he visited the property with friends, and decided to stay when those friends left.
They later reported him missing.
"Human-like bones" found in a burnt-out tree trunk were located during a three-day extensive search of the 2000-acre property last month.
The bones are believed to be human and have been sent for forensic examination. But they are yet to be identified as human or belonging to any person.
Detective Superintendent Danny Doherty said police will allege Collison was fatally shot by the Sydney man at the Menah property over a drug-related dispute.
Collisson had previously spent more than 20 years in jail for the killing of a teenager in 2000.
"We believe this was a brutal murder of a man on the 25th of September in cold blood," he told reporters on Sunday.
"You can only call it callous and cold-blooded, the way he's been killed."
Det Doherty said given Collisson's size, it would be fair to assume more than one person would be required to move his body and urged anyone with information to come forward, "otherwise police would be knocking on their door and making those inquiries in person".
"We believe there's alot of people that may have knowledge of Mr Collisson's murder," he said.
He said the Collisson and the man charged knew each other and were both well known to police.
There is no obvious link to Collisson's previous murder conviction, Det Doherty said.
Collisson spent more than two decades in prison after he was convicted of the "cold blooded, callous and cruel shooting" of 17-year-old Shahab Kargarian.
Shahab and his girlfriend, Shabnam Faiz, 17, were eating takeaway in a park on Sydney's north shore in 2000 when Collisson, accompanied by another man, demanded the teen's wallet.
He then shot the victim four to five times.
Collisson pleaded not guilty to the murder and maintained his innocence throughout the trial and sentencing.
The 33-year-old man was remanded in custody and will face Dubbo Local Court on Monday, charged with murder and a number of weapons charges.
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