Raju Kumar alias Raju Pehalwan (33), was arrested yesterday from outer Delhi's Siraspur on the basis of a tip- off, they said.
On September 2, Gajendra Bhati was killed and his associate Balbir Singh Chouhan injured when two unidentified motorcycle-borne assailants fired at them in Ghaziabad's Khoda colony, the police said.
The Uttar Pradesh Police arrested one Narender alias Fauzi on September 11, who revealed that Pehalwan, who belongs to Loni in Ghaziabad, was also involved in the killing.
The leader had given them a contract of Rs 10 lakh and Rs 50,000 was paid in advance.
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After Fauzi's arrest, the other accused were evading arrests. Non-bailable warrants had been issued against them by the court in Uttar Pradesh, the police said.
Yesterday, the police came to know that Pehalwan was seen in Siraspur and was planning to change his hideout.
A team comprising of police personnel from Delhi and the Uttar Pradesh Police was constituted.
Pehalwan told police that Bhati had attacked him in 2013 after their vehicles collided in Greater Noida.
Bhati and his accomplices were charged with an attempt to murder but Pehalwan forced into reaching a compromise with the accused in 2015, said the DCP.
The accused claimed that Bhati kept threatening him and even fired bullets at his sportswear factory in Noida. No case was registered against Bhati since he exercised influence in the area, Pehalwan claimed during an interrogation.
Sharma had a political rivalry with Bhati and joined hands with him.
Pehalwan revealed that he had been contracted by two people Suraj and Parmod, residents of Loni, for Rs eight lakh to kill a businessman in Sanjeev Nagar.
Bhati has played in various national and international kabaddi tournaments.
Between 2005 and 2009, he represented Uttar Pradesh at national level. He has also been part of the Indian kabaddi team.