Essex Police said the man, 50 – who has not been named, was arrested in Cheshire on Wednesday after “significant new information” came to light.
He was subsequently released on bail until April 12.
Butcher Mr Lubbock, 31, had been attending a party at Barrymore’s luxury home in Roydon with eight other people on March 31 2001 when he died.
Police said they would contact all of those at the party in the coming days following the arrest, and warned: “We know that not everyone was responsible for what happened, but someone was.”
Responding to the breakthrough in the case, Mr Lubbock’s 76-year-old father Terry who is terminally ill, told the PA news agency: “There is just so much going on in my head, I can’t get my head around it.
“Of course I’m happy.
“Of course this is good news.
“But it’s been 20 years.
“This has nearly killed me.”
Speaking outside Essex Police headquarters in Chelmsford, Detective Superintendent Lucy Morris said: “The arrest comes after significant new information came to light following our renewed appeal for information and offer of an enhanced reward, which coincided with a major TV documentary broadcast in February 2020.
“This information has led to us making an arrest and over the coming days we will be contacting all those who were present at the party at the time as well as others who may have information.
“We believe someone or some people at that party know what happened.”
She added: “We have never given up on finding out exactly what happened to Stuart, and we will not stop in our pursuit of justice.”
And in a renewed appeal for further information, she added: “Now is the time to come forward.”
Last year’s Channel 4 documentary about the case prompted Barrymore, 68, to issue a fresh denial of any wrongdoing, saying: “I have had nothing to do with this whatsoever and yet I keep getting bashed and bullied by the media.”
Barrymore was criticised for leaving his home soon after Mr Lubbock was found floating in the outside pool.
The former television presenter, who became a household name for shows such as Strike It Lucky, has always maintained he had no involvement in Mr Lubbock’s death.
A post-mortem examination showed Mr Lubbock had suffered severe internal injuries which suggested he had been sexually assaulted.
Alcohol, ecstasy and cocaine were found in his bloodstream.
Barrymore refused to answer some questions at the inquest in 2002, but said he could not jump in and try to save Mr Lubbock because he could not swim – a claim disputed by others who knew the star.
The coroner recorded an open verdict.
Barrymore, his former partner Jonathan Kenny and fellow party guest Justin Merritt were arrested in 2007 on suspicion of sexual assault and murder, but were later released without charge.
Barrymore’s television career collapsed in the wake of the allegations, although he enjoyed a brief return to the spotlight during a stint on Celebrity Big Brother in 2006.
In 2009, the police watchdog published the findings of a review of the investigation into Mr Lubbock’s death, concluding that officers missed crucial evidence and did not ensure vital forensic tests were completed until six years later.
A spokesman for Barrymore on Wednesday said it would be inappropriate to comment following the arrest.