A man has been arrested in New South Wales over the alleged murder of young mother Karlie Pearce-Stevenson.

Karlie's remains were found in the Belanglo Forest in NSW in 2010, while the remains of her daughter Khandalyce, believed to be aged about two, were found near a suitcase alongside the Karoonda Highway in South Australia's Murray Mallee earlier this year.

Police said detectives arrested a 41-year-old man at Cessnock Police Station at 4:15pm, Wednesday.

The man, who is in custody, is expected to be charged with Karlie's murder overnight.

Police said inquiries into the alleged murder of Khandalyce were continuing.

In October police said that they believed the pair were most likely murdered in December 2008 because there were no confirmed sightings of them after that date.

Officers made a breakthrough in the murder investigations when forensic scientists were able to create a DNA profile from the child's bones, which was later linked to the bones of her mother discovered years earlier in NSW.

Both Khandalyce and Karlie were reported missing in the Northern Territory in 2009 but police said the report was later withdrawn.

The pair moved away from her family between 2006 and 2008 with Karlie intending to travel and work.

South Australia's Victims' Rights Commissioner, Michael O'Connell, said Karlie's family was shocked by the pace of the investigation since police identified her body.

"The family are thankful that the police persisted, even when they didn't know the identity of these people, in trying to obtain justice, and they are keen to see justice done for Karlie, for Khandalyce, and also obviously for themselves," he said.

On Tuesday, police alleged that Karlie's bank account was used over the years to access almost $100,000 and her phone was used to contact family to make it look like she was still alive.

The woman's bank account was accessed on hundreds of occasions after she was last seen alive late 2008, Detective Superintendent Des Bray of the Major Crime Investigation Branch told reporters in Adelaide.

Police also said her mobile phone was used to send text messages to family members to fool them into thinking she was alive and well.

Detective Superintendent Bray also confirmed Ms Pearce-Stevenson was last seen alive in Canberra in December 2008.

Police allege a woman posed as Ms Pearce-Stevenson during a bank visit in 2010 and at Centrelink later that same year.

A member of her family sent money to her bank account and it was later withdrawn, police said.

Police also said a bank card was used several times at the Royal Adelaide Hospital during 2010 and later used, in March 2012, at Charnwood in Canberra.

Detective Superintendent Bray said the victim's mobile phone was kept and used, including to contact the young woman's family to provide "proof of life".

He said the message bank was accessed from time to time.

"We know ... some of the SMSs were sent to family members, again to suggest Karlie was still alive and that on at least a couple of occasions that we know of a female falsely represented herself to be Karlie in communication with family," he said.

A death notice was printed on Tuesday in the Northern Territory News for Karlie and Khandalyce.