Aymen Terkmani died after being stabbed in the chest in the maximum-security Lithgow Correctional Centre in regional NSW on September 25.
He was airlifted to hospital but declared dead by paramedics en route, having also received medical treatment in prison after the attack.
Detectives arrested a 22-year-old inmate at Goulburn prison on Wednesday.
He was charged with murder and refused bail to appear before Goulburn Local Court.
Terkmani was jailed for the 2015 murder and sexual assault of 16-year-old Mahmoud Hrouk.
The teenager's brother spotted his bloodied, half-naked body through the window of an abandoned home in Sydney's Fairfield East the day after Mahmoud told his mother in a cut-off call that he was with his "friend Aymen".
The body of teenager Mahmoud Hrouk was found in a vacant home in Sydney's west in 2015. (Ava Benny Morrison/AAP PHOTOS)
Terkmani's sentencing judge, NSW Supreme Court Justice Lucy McCallum, said the then-21-year-old subjected the youth to "unspeakable violence" before he died.
"The offender subjected the victim to the most brutal and horrific attack, inflicting injuries too numerous to list and too gruesome to describe," Justice McCallum said as she sentenced him to a maximum term of 45 years.
Prosecutors had called for Terkmani to be jailed for life.
Justice McCallum declined to do so due to his young age at the time of the murder.
Terkmani's sentence was backdated to the day the jury delivered a guilty verdict, meaning he would not have been eligible for parole until 2050, when he would have been 57.
The court was told Terkmani and his victim had been spending time together at the vacant public housing property on the night of the murder.
No clear provocation was proved for the sustained attack on the teenager, which involved the use of a rolling pin and a toaster as weapons.
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