CANBERRA (Reuters) -- An Australian man was arrested on Monday in connection with the suspected murder of British tourist Peter Falconio who has been missing for over two years after a terrifying outback ambush, police said.

"A man has been arrested on an interstate arrest warrant in relation to the murder," said a spokesman from the South Australian state police.

He said the man would appear in the Adelaide magistrate's court earlier today when Northern Territory police would apply to extradite him to Darwin in Australia's tropical north.

Despite a huge manhunt across an area five times the size of Britain, there has been no sign of Falconio since he and his girlfriend, Joanne Lees, were ambushed by a gunman in July 2001 as they drove along a remote highway in the Northern Territory.

Lees was kidnapped but managed to escape and hid in the bush while the attacker hunted her with a dog. She later flagged down a passing motorist.

Police issued an arrest warrant for the man in October 2002.