Campbell was just 21 when she went missing in 1984 from her Melbourne home.
A coronial inquest concluded in 1998 that she was likely dead – although how exactly she died was never established.
The 65-year-old man was arrested in Cardiff South, near Lake Macquarie in the NSW Hunter region.
He was charged with murder and faced Belmont Local Court.
He will face court once again on Friday as police attempt to extradite him to Victoria.
As part of the April call for new information about the disappearance, Campbell’s mother said she was hoping the renewed investigation would give the family much-needed answers.
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“The most awful part is not knowing where she is or what happened to her, and that the person responsible for taking my daughter away has not been held accountable,” Campbell’s mother Jean said at the time.
“I’m desperately hopeful that the re-investigation of my daughters’ case may bring us answers after all these years.
“I love her and still miss her so dearly.”
Campbell was a member of the Royal Australian Air Force (RAAF) when she disappeared.
She was reported missing after she didn’t show up for a shift.