A homeless man has spent the night in custody after being arrested in the Melbourne CBD over a hit-run crash that killed a Dutch woman.

The 26-year-old man was arrested on Bourke Street in Melbourne's CBD at 5.30pm on Monday after a member of the public recognised him from images released by police.

#BREAKING: Police have made an arrest on the hunt for the Chapel Street hit run killer. @NearyTy_9 is LIVE. #9News pic.twitter.com/jJFdYLZIse

— Nine News Melbourne (@9NewsMelb) August 13, 2018

A 27-year-old woman was riding her bike in South Yarra when she was hit by a stolen Mercedes-Benz on Sunday.

The victim, who police are yet to name and who was was living in Melbourne on a working visa, died while the driver of the Mercedes got out of the car and left the scene.

Her relatives are on their way to Melbourne from the Netherlands.

AAP