Former fugitive Jonathan Dick has been remanded in custody after he was arrested and charged with the murder of his brother, who was killed with a sword at a shopping centre in Melbourne's east more than two years ago.

Key points: Mr Dick was arrested and charged with his brother David Dick's murder

Mr Dick was arrested and charged with his brother David Dick's murder Police said someone recognised him and performed a citizen's arrest

Police said someone recognised him and performed a citizen's arrest Mr Dick had been wanted by police since February 2017

Mr Dick, 41, had been on the run from police for two and a half years after his 36-year-old brother, David Dick, was killed at the Doncaster shopping centre on February 3, 2017.

Police had been searching for Jonathan Dick since his brother's death more than two years ago. ( Supplied: Victoria Police )

After a brief court hearing in the Melbourne Magistrates' Court on Monday night, Mr Dick was remanded in custody ahead of a filing hearing on Tuesday.

He had been arrested on Monday following an alleged assault at a car park near the corner of Flinders Street and Hosier Lane.

Chief Commissioner Graham Ashton had said investigators were still piecing together the circumstances of Mr Dick's arrest, but it appeared one of the men knew Mr Dick and recognised him.

"Then that's enabled them to make — for want of a better term — a citizen's arrest and for police to get there as soon as we could," he said.

Mr Ashton said police were investigating reports Mr Dick was stalking one of the men.

After the arrest, Mr Dick was taken to hospital for treatment under police guard before he was later interviewed and charged with his brother's murder.

The two men were assisting investigators and also suffered injuries, police said.

One of them was taken to hospital.

Television footage showed Mr Dick, with a bloodied face, being arrested and escorted into an amulance. ( 9 News )

Police closed a section of Hosier Lane, which is one of Melbourne's most famous graffiti laneways, as investigators examined the car park.

What appeared to be blood was splattered near the entrance to the car park on busy Flinders Street.

Just inside the car park, a knife with a red handle could be seen on the ground.

A knife remained near the entrance of the car park as police investigated. ( ABC News: Iskhandar Razak )

Mother 'overwhelmed' by news of son's capture

In 2017, police said David Dick was "brutally" attacked at the Doncaster shopping centre.

Members of a fitness group who had been training nearby tried to save him before he died at the scene.

David Dick died shortly after the shopping centre attack in 2017. ( Supplied: Victoria Police )

The mother of the men, Carol Cloke, said today she wanted to thank her family and friends for the support they had given her over the past two and a half years.

"I'm overwhelmed by the news this morning that my son has been found," she said in a statement released by police.

"All I ever wanted was for him to be found alive and I feel comfort in that.

"I would also like to thank Victoria Police who have always been here for me and kept me updated. I have never felt alone during this because of their support."

What looked like blood was trailed across a Flinders Street car park entrance on Monday. ( ABC News: Iskhandar Razak )

Police issued several appeals for information about Mr Dick's whereabouts since his brother's death.

Officers initially appealed for the public's help to identify a man in CCTV footage taken the day before David Dick's death, before the family realised the man in the vision was his brother.

They last year offered a $100,000 reward for information leading to Jonathan Dick's capture.

Anyone with information about this morning's incident is asked to contact Crime Stoppers.