New South Wales's most wanted man, Malcolm Naden, has finally been captured after seven years on the run.

Police found Naden at a holiday house 30 kilometres west of Gloucester in the Upper Hunter region just after midnight (AEDT).

Officers from the tactical operations unit and the dog squad swooped on the property, surrounding and arresting the 38-year-old former abattoir worker.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 3 minutes 46 seconds 3 m 46 s Listen to the AM story Download 1.7 MB

Now bald and with a bushy beard, Naden was dressed in a muddy shirt as he was led away by detectives.

A rifle was seized from the property, after police revealed last week that Naden was armed with a semi-automatic rifle.

They had said thefts in the areas had given them fresh information about his whereabouts.

Sorry, this video has expired Residents breathe sigh of relief after Naden caught

Naden is now being questioned over the disappearance of his cousin Lateesha Nolan and the murder of her friend Kristy Scholes at Dubbo in 2005, and the aggravated indecent assault of a 15-year-old girl.

He is also being questioned over the shooting of a police officer last December when police got close to catching him at a camp in rugged bushland near Nowendoc.

He is expected to be charged with murder and attempted murder.

The father of Lateesha Nolan, Mick Peet, says he spent a sleepless night after being called with the news.

"It's unbelievable, I just can't believe it," he said.

"After seven years it's been so long, we've been waiting for this day and I didn't think it was going to come.

Who is Malcolm Naden? 38-year-old former abattoir worker

38-year-old former abattoir worker Described as an expert bushman

Described as an expert bushman On the run since 2005

On the run since 2005 Believed to have been living off the land and raiding isolated homes for food and supplies

Believed to have been living off the land and raiding isolated homes for food and supplies Hunt for Naden involved police snipers and dog teams

Hunt for Naden involved police snipers and dog teams Police believe they nearly caught him near Nowendoc in December

Police believe they nearly caught him near Nowendoc in December He allegedly shot an officer before slipping away into the bush

"It's still sinking in. It's unbelievable the feeling we've got at the moment, but we're just one step closer to closure."

Local Gloucester business owner Graham Holstein says property owners in the district will be relieved that Naden has finally been caught.

"I think most of the people in outlying areas will be very happy to hear the news," he said.

"Inside the town itself there wasn't any great concern. As a matter of fact, a very nonchalant attitude in most cases.

"But my personal feeling was that he was a dangerous guy that needed to be caught."

Naden twice evaded capture when police got close to catching him in bushland.

Police Minister Mike Gallacher has praised the officers involved in the capture, after what has been a tough week for NSW police.

"Yesterday was a tough time for police. We had a number of police officers injured, we had a fatal motor vehicle accident, we had shootings in south-western Sydney and of course the continuing investigation into the tragic death of the young man following the use of a Taser," Mr Gallacher said.

"To get this result last night was a fantastic result for police after the work that they've done.

"Policing is an incredible occupation. It is incredibly dangerous at times and incredibly rewarding."