Tobias Friedrich Moran, formerly known as Tobias Suckfuell, had been travelling around Australia with Ms Strobel when her body was found under palm fronds less than 100 metres from the Lismore caravan park she was last seen at in 2005.
The 25-year-old school teacher had been suffocated with a pillow or plastic bag.
Strobels’ father Gustl told German media the family was “totally surprised” by the development.
“We cannot believe it,” he said.
Ms Strobel’s murder has remained unsolved despite the establishment of a strike force and the NSW government offering a $1 million reward in 2020.
But on today, it emerged Moran had been arrested in connection with the case after a warrant was issued by NSW Police.
The 42-year-old faced Perth Magistrates Court from custody in regards to an extradition application.
Magistrate Sandra De Maio said she would grant the order, telling Moran he would be released into the custody of police until he faced court in NSW.
Moran is expected to be flown to Sydney on Wednesday before facing Sydney’s Downing Centre Local Court the following day.
NSW Police are yet to formally disclose the nature of his charges but confirmed the man’s arrest, saying further information would be provided when available.
“Strike Force Howea investigators are continuing to work with their international counterparts, with investigations continuing,” police said in a statement.
Moran’s lawyer Tony Elliott said his client had no previous known convictions and he was unaware of any other charges or bail proceedings.
Police have previously said they believe Ms Strobel was murdered by Moran, who refused to return to Australia to give evidence at her inquest.
Deputy NSW Coroner Paul McMahon in 2007 found there was insufficient evidence to recommend charges but said he had a “very strong suspicion” Moran, then known as Suckfuell, was involved in the killing.
Strobel had been on a night out with Moran and friends when she was last seen at the Lismore Tourist Caravan Park on February 11, 2005.
Her body was found six days later, at a sports ground less than 100 metres from the caravan park.
Authorities in Germany also offered a reward in 2014 of 10,000 Euros to German and Australian residents with any information about Ms Strobel’s death.