Police have previously said they believed at least four people were involved in the homicide and were captured on CCTV camera fleeing the crime scene.
As the attackers escaped, one of them was heard swearing and yelling, "Oh my God, what have we done?"
A neighbour in the block of flats next to Tolley's found her body. She had heard Tolley screaming.
A year after Tolley's death, police had said they had narrowed the suspect list to 12.
They were either directly involved in committing the murder, helped plan the attack on Tolley, or assisted the killers after the murder.
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Last night's arrest was the third in relation to Tolley's death.
Detective Inspector Scott Miller says this is a good result in the three-and-a-half-year investigation.
"Police continue to pursue the outstanding offenders, with further investigation phases in place. We are still talking to members of the Upper Hutt community and will continue to do so," he told the Herald.
In September last year, three years after Tolley was killed, a 27-year-old man was arrested and charged with her murder.
His name is currently suppressed and he has pleaded not guilty.
The Lower Hutt man also faces charges of assaulting with intent to rob, while armed with a shotgun, and a charge of entering Tolley's Ward St flat while armed with intent to commit an imprisonable offence.
Following an appearance by the accused killer in November, a Tolley family spokesman read out a statement.
"To everyone who is withholding information, we implore you to think about if this was your daughter, granddaughter, niece, aunty, cousin - what would you want? Would you want us to stay silent or to help you?
"Another journey of this heinous crime is now starting."
The man's lawyer said the trial, initially set down for October this year, was "undoubtedly going to be complex and quite lengthy".
After news of the arrest broke police said the investigation was far from over.
Inspector Scott Miller earlier said police would be going back to people already spoken to in the course of the investigation, and detectives would continue to "actively pursue other suspects".
Detective Senior Sergeant Glenn Barnett, the officer in charge of the investigation, said his team had been working continuously since Tolley's death nearly three years ago and there had been some planning go into the first arrest.
Tolley's mother Cathrine MacDonald previously told the Herald she had no doubt her daughter's killers would be caught.
She described her daughter as a beautiful, caring person who was "very much loved by so many".
"We miss Lois so much, this has devastated our family and her friends, they stole her future from her and all of us."
