Jason Palmer's body was found in a river at Menangle, an hour south of Sydney, on February 29, 2004, three weeks after he was reported missing.
The 34-year-old's body was weighed down with rocks in the murky depths of the Nepean River, but an initial investigation did not identify a suspect.
A 2007 coronial inquest found Mr Palmer was stabbed to death in Lakemba, in western Sydney.
Authorities restarted an investigation in 2022 which led to the arrest of a 52-year-old Queensland man in southwest Sydney on Monday, before he was charged with murder.
The cold case had baffled police for more than 20 years before the man was arrested in Sydney's west (Supplied by Nsw Police/AAP PHOTOS)
Detective Superintendent Daniel Doherty, who runs the NSW Police homicide team, said only persistence and focus from detectives allowed them to track down the alleged offender.
"It's been 20 years since Mr Palmer, who was originally from the UK, is alleged to have been murdered ... he was a husband and father, and police had always remained hopeful of an arrest," he said.
"This arrest once again demonstrates that investigators will not rest until there's a resolution for unsolved matters, and to provide answers to families."
The accused was refused bail and will face the Campbelltown local court on Tuesday.
It is alleged he was known to Mr Palmer.
Detectives think there are members of the public that know something about the case and are urging them to make contact.
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