A man arrested over the shooting of New Zealander Nicholas Heyward is set to be released, local media report.
Mr Heyward, 31, was killed on Monday by motorcycle bandits who shot him four times.
He died in the arms of his friends, while the assailants fled into the suburbs of west of Mendoza.
The Buenos Aires Herald reported this morning that local police had one person in their custody following raids in relation to the attack on Mr Heyward.
But the man is set to be released because neither of the surviving witnesses to the shooting recognised him, El Sol Online reports.
Read more of the Herald's coverage of this story today:
Team to wear black in slain mate's memory
Argentine police were under pressure to arrest the motorcycle bandits before the two friends who were with Mr Heyward when he died leave the country.
It has been revealed that Mr Heyward was shot four times with a .22 calibre pistol and died in the arms of his friends while the assailants fled into the suburbs west of Mendoza.
Following the offer of a 40,000 pesos ($5800) reward for information leading to the capture of the assailants, who police believe are between 12 and 21 years old, a witness came forward on Monday night.
A teacher who drove past the scene at the time of the attack told police he found himself facing the attackers and was able to describe them in detail, elsol.com reported.
Mr Heyward, 31, and his two friends, an Australian woman and a French man, arrived in Mendoza on Sunday after travelling north from another Andean Argentine town, Bariloche.
One in the group wanted to see the city sights, including the park near the World Cup stadium. It was outside the south side of the stadium that the attack happened.
The trio, who are believed to have been in Argentina for three weeks, were approached by two young men on a motorcycle.
The passenger tried to rip Mr Heyward's bag off him. But Mr Heyward fell to the ground to try to cover his bag and stop them stealing it, at which point they opened fire, then sped away empty-handed.
Daniela Bulos, deputy director of the Ministry of Sports, was taking her children home from school and was one of the first on the scene. She and another man and woman tried to save Mr Heyward's life.
"He was breathing and had a normal pulse. We took turns while waiting for an ambulance. We asked him not to go, but he did not resist," she told elsol.com after making her statement to police.
Local media yesterday reported that Mr Heyward's friends wanted to go to Santiago, Chile, but could not leave Mendoza until the killers were arrested and they could make a positive identification.
As he wrestled to hold on to the bag, the assailants fired five shots, four of which hit his abdomen, chest and neck, uno.com.ar reported.
Yesterday at Itaka Hostel where the New Zealander had been staying, the mood was sombre and groups of backpackers sat around talking quietly.
Jeremy Galdames, who works at the front desk, said he'd "hung out with" Mr Heyward about three times and called him an "awesome guy".
"It's really shocked everyone - no one could quite believe it. Where they were, that was meant to be safe."
Mr Heyward, a trained physiotherapist, is understood to have been on holiday, travelling in Chile, Argentina and Peru, where he had hoped to go rock-climbing.
He had lived in Australia for a number of years and had been teaching English while travelling.
Life goes on in park as locals gripe at lack of police
In Mendoza's popular Parque de San Martin, less than a day after a young man was ruthlessly gunned down, it seems as if nothing had happened.
But under the surface, frustration at Mendoza's police system is reaching boiling point. A protest is planned on Saturday to demand more policing of Parque de San Martin following Nick Heyward's death on Monday.
Ariana Diaz, 45, visits the park frequently to walk around its many well-trodden dirt and concrete tracks. Yesterday, just as the sun was setting and the park transformed from a favourite spot to enjoy the city's year-round sunny days to a dangerous no-go zone for tourists and locals alike, she said: "See, no police. Anywhere."
One of the major problems was that minors were let off many crimes they committed and so are the ones who "get away with murder".
Melbourne couple Nicholas Jones, 28, and Sommer Williams, arrived about the time Mr Heyward was killed at 3.40pm on Monday. But it wasn't until Tuesday morning that they learned what happened via a Facebook message from Mr Jones' mother.
"It was weird. It was like nothing had happened. We went for a walk around the park, only half of it, but it was just normal. But every time a motorbike went past you sort of jumped a bit."
Three weeks into their six-month spell backpacking South America, the pair haven't experienced any crime first-hand, but Mr Heyward's death was a raw reminder of what could go wrong. Marcelo Riquero, 32, said the people of Mendoza were angry and embarrassed at what had happened to Mr Heyward.
The last time a foreigner was murdered was a French woman four years ago, he said.
He, too, was frustrated at the police and at their corruption.
But 69-year-old Elva Davis, who was out walking her dog, has accepted that the system will never change and warns as many tourists as she can.
"Keep your money in your belt, phone in your pocket and hold your bag tight. You have to be careful."
Letter from Argentina
To the New Zealand Herald, and Nicholas' family: My name is Andrea, I'm 21 and I live in Mendoza, Argentina. I was very sorry to hear about the murder of Nicholas, sometimes it's still hard to believe things like that can happen. My city is really used to hearing about people getting killed by thieves for a bag, a pair of shoes, or even for nothing.
It is sad, and the worst part: it happens almost every week and it doesn't ever seem to stop. I'm very sorry for your loss, and I hope you know there are many people here fighting for justice.