One of Australia's most wanted men has been arrested in Greece after evading police for nearly three decades over an alleged murder.

James Dalamangas, 56, was arrested on Sunday by Greek authorities at a rural property in Aigialeia, central Greece.

He has long been accused of the fatal stabbing of father-of-two George Giannopoulos in a Belmore nightclub in Sydney's southwest in 1999.

A warrant for Dalamangas's arrest was issued the day after Giannopoulos was fatally stabbed in the neck and stomach while attempting to break up a fight at the Pariziana nightclub.

Police failed to locate Dalamangas, with authorities believing he moved to Greece shortly after the incident, where he worked as a farmer and lived under several aliases.

After 27 years of eluding authorities, Dalamangas was caught on Sunday after he allegedly shared false information during a roadside police check and confessed he was wanted in Australia.

Heavily armed officers then raided Dalamangas' home in Achaia, allegedly finding a crossbow, three knives, 13 mobile phones, a computer and three USB sticks.

Dalamangas was charged with weapons offences and making false statements, and is expected to appear before the Greek Public Prosecutor's Office on Monday (Greek time). 

Australian authorities are expected to petition for Dalamangas to be extradited.

Local media report his 86-year-old father and 47-year-old partner were also arrested and are accused of harbouring an alleged criminal. 

NSW Police are aware of Dalamangas' arrest and are understood to have informed the Giannopoulos family, who were 'very happy' to receive the news, the Daily Telegraph reported.

Dalamangas had been the subject of an Interpol Red Notice, with the Australian Federal Police (AFP) renewing a $200,000 reward for his arrest in 2024.

Immediately after he vanished in 1999, his mother Chrysou or Christine Dalamangas said her son was 'always a good boy'.

She said he was likely hiding because he was 'scared the police will do something to him... hurt him' as she claimed they had after his brother Peter's death.

Mrs Dalamangas said she had not seen her son since the afternoon prior to Mr Giannopoulos' death. 

Police previously arrested Dalamangas after his brother Peter, a 23-year-old telecommunications worker and bodybuilder, died in a brawl with security staff at Star City Casino on January 31, 1998.

Dalamangas, then 28, was charged with assaulting casino guards on the same night his brother died.

The Dalamangas family campaigned for justice after Peter's death, claiming he had been 'murdered' at Star City.