Constable Michael Ferguson was shot twice at close range to the back of the head by an IRA gunman in Shipquay Street on January 23, 1993.
The 21-year-old Catholic policeman from Omagh was on duty at the time and was taken to Altnagevlin Hospital but died from his injuries.
One man was jailed in 2015 in connection with the murder.
The PSNI yesterday said that detectives from the PSNI’s Legacy Investigation Branch had arrested a 64-year-old man in Derry on Monday.
He was detained under Section 41 of the Terrorism Act and taken to the serious crime custody suite in Belfast for questioning.
After 24 hours in custody, he has now been freed.
The police investigation continues.
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