The driver who allegedly killed Sydney teenager Natasha Gadd in a hit-and-run had a suspended licence, police say.

Police arrested a 35-year-old man on Tuesday night following a three-day manhunt for the suspected driver of the white ute that hit Ms Gadd on Henry Lawson Drive, Milperra, at 4.30am on Sunday.

Investigators attended a factory on the Princes Highway in St Peters just before 8.30pm on Tuesday and located a white Toyota Hilux that they believe was involved in the crash.

The vehicle was seized and will undergo forensic examination, NSW Police said in a statement on Wednesday morning.