Published Tuesday, 25 February 2014
Mr Collins was murdered in 1999. (© PSNI)
The 59-year-old suspect was detained in Newry on Tuesday afternoon.
It followed a police search of a house.
Mr Collins, a former IRA man, was beaten and stabbed on a country road in 1999 just outside Newry, and a short distance from his home, in a suspected revenge attack for turning supergrass.
The 45-year-old was deliberately struck by a car while out for an early morning walk with his dogs on Doran's Hill before being beaten and stabbed numerous times in the face and head.
Last month, police investigating the brutal murder revealed that they had made a DNA breakthrough in the hunt for Mr Collins' killers.
The arrested man has been taken to Antrim PSNI Station for questioning.
© UTV News