However, the judge declined to give Latu name suppression and said it was in the interest of an open justice system that his name be published.
Latu is to reappear on Thursday.
Mr Dhaliwal, 22, was found dead at a Fulton & Hogan construction site on Selwood Rd in Henderson at 3.11am on November 18.
An autopsy showed Mr Dhaliwal, who was working his first shift as a guard, died of a blow to the head.
He was found slumped over a concrete slab near the main gates of the site by workers returning a truck.
Detective Senior Sergeant Stan Brown this morning said the arrest was the result of information from the public and six months of work from investigators, he said.
Sikh Council spokesman Daljit Singh said he called Mr Dhaliwal's mother as soon as he was told of the arrest.
She was relieved and would be travelling to New Zealand soon, he said.
"She was very rapt with the news. Very pleased with it. It is pleasing for the community as a whole."
Police said an investigation was continuing and more arrests could be made, Mr Singh said.
Mr Dhaliwal was born in India but came to New Zealand to study about two years before his death.
His friends and family described him as a "kind soul'' who came here for a better future and education.
Information on the case can be provided anonymously to Crimestoppers on 0800 555 111.
