Paul Quinn, 21, was attacked at farm buildings near Castleblaney in Co Monaghan, south of the border with Northern Ireland. His family blamed the IRA for the killing but this was denied by republicans.
The detained man, aged in his early 20's, was arrested in Dromad, Co Louth, in the Republic.
Garda said he is being held at a nearby station under the Offences Against The State Act.
Mr Quinn was from Cullyhanna in south Armagh in Northern Ireland. He was killed in October 2007.
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