Pietro Magistrale, a 61-year-old resident of Laval, Que., was picked up today and faces first-degree murder charges.
A team of RCMP and provincial police officers has also been searching his home.
A half-dozen people have been arrested in connection with the killing of Sal (The Ironworker) Montagna, a former head of New York's notorious Bonanno crime family. The group already included Magistrale, who had faced lesser weapons charges in the case.
Montagna was gunned down as he fled a home and was found by a river.
Crime analysts now believe that killing was a turning point in the Mafia war that has erupted in Montreal over the past several years.
They say it signalled the disintegration of the faction working to unseat the long-dominant Rizzuto clan, with that group having since splintered into new rivalries.
The original arrests in the killing came in December 2011 and included Raynald Desjardins, who is believed to have been a key player in the movement to depose the Rizzutos.
Now a number of those believed to have been undermining the Rizzutos are dead or in prison.
And reputed crime boss Vito Rizzuto is a free man, after having served a lengthy U.S. prison stint.
Note to readers: This is a corrected story. An earlier version said Magistrale is the seventh person arrested in the case but he had, in fact, already been on the original list of those charged.Suggest a correction