Las Vegas authorities announced.
Davis, 60, was arrested Friday morning in Las Vegas, according to authorities. His wife’s Henderson home was searched in July as part of the ongoing investigation into the shooting.
"For 27 years the family of Tupac Shakur has been waiting for justice," Las Vegas Metropolitan Police Department Sheriff Kevin McMahill said during a press briefing on Friday, adding that detectives spent "countless hours" on the homicide investigation.
Sekyiwa 'Set' Shakur, Tupac's sister and President of The Tupac Amaru Shakur Foundation, released a statement on Instagram on Friday following the news of the arrest, describing it as "no doubt a pivotal moment."
At a news conference later on Friday, police officer Jason Johansson said the force's persistence in the investigation had "ultimately paid off", before explaining what led to the breakthrough.
He said Orlando Anderson, the suspect's late nephew, and Shakur had been involved in a fight in a casino shortly before the rapper was shot on 7 September 1996. He died in hospital a few days later.
Mr Johansson showed reporters hotel security camera footage of Anderson being beaten. He said this ultimately led to the retaliatory shooting of Shakur as he was waiting in his car at a red light.
Shakur is still largely considered one of the most influential and versatile rappers of all time.
In his memoir, Davis said he was in the front passenger seat of the Cadillac and had slipped the gun used in the killing into the backseat, from where he said the shots were fired.
Los Angeles police detective who spent years investigating the Shakur killing and wrote a book about it, said he's not surprised by Davis' arrest.
The former Los Angeles police detective said he believed the investigation gained new momentum in recent years following Davis' public descriptions of his role in the killing, including his 2019 memoir.
"It's those events that have given Las Vegas the ammunition and the leverage to move forward," Kading said. "Prior to Keffe D's public declarations, the cases were unprosecutable as they stood."
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