The 70-year-old former rugby league player was taken into custody by detectives from the Queensland Police Service's Homicide Squad at his home in Biggera Waters just before 8am Wednesday.
Two days after Mrs Dawson went missing, Joanne Curtis, a 16-year-old student at Cromer High School where Mr Dawson was a teacher, moved into the family's home.
Speaking at a press conference following the arrest, NSW Police Commissioner Mick Fuller said over the course of Operation Scriven and the re-launch of the investigation earlier this year, additional evidence was identified that enabled them to build on their case against Chris.
Chris Dawson 70 has been arrested and is expected to be charged with his wife's murder
"They were predominantly statements from witnesses that helped us to pieces of the puzzle is together", he said.
In 2015, NSW Police established Strike Force Scriven to re-investigate the circumstances surrounding Dawson's disappearance and suspected murder.
In September investigators spent nearly a week digging up the Dawsons' former Bayview home but found no human remains and no significant clues.
Mrs Dawson's brother Greg Simms said he was "quite emotional" after hearing of the arrest. Her family, two coroners and the current NSW police commissioner think she was killed.More news: Panthers fire two defensive assistants, including Brady Hoke
Hit podcast "Serial", which investigated the murder of Baltimore high schooler Hae Min Lee and the subsequent arrest and prosecution of Adnan Syed, helped reveal little-known evidence regarding the case.
The former Newtown Jets rugby league player, who is at the centre of the popular Teacher's Pet podcast, appeared in Southport Magistrates Court today with his head bowed, wearing a t-shirt, shorts and bare feet. She was 33 at the time.
Chris and Lynette Dawson on their wedding day.
'What is important to me was justice for Lynette Dawson and her family, and today is an important step forward in that, ' he added.More news: The Internet Reacts To Cardi B Announcing Split From Offset
"That dig didn't provide any additional information, unfortunately, and, look, from our perspective we would have dearly loved to have found the body of Lynette Dawson not just for the brief of evidence but for her family", Fuller said.
"We have solved homicides before without identifying the body", he said.
"There is clear and uncontested evidence that Lyn Dawson was alive long after she left Chris and their daughters", they said in a statement.
"We have to also ensure Chris gets due process".More news: Tsunami warning after magnitude 7.5 natural disaster strikes in Pacific Ocean
"We are confident with the case", Supt Scott Cook told reporters on Wednesday.