The development emerged as a gun found on the bank of the Thames, near where Ms Dando was shot, was ruled out as the murder weapon.
Mr Savva, who was first held in October, is one of only two people who have been arrested in connection with the Dando case. He is not believed to be a prime suspect in the investigation into the Crimewatch presenter's death.
His arrest in October is understood to be linked to his suspected involvement in the theft of cars. Police at the time were keen to trace a Range Rover seen near Ms Dando's home in Fulham, south-west London, on the morning she died.
Earlier this week it emerged that the police had spent hundreds of thousands of pounds on a surveillance operation on Mr Savva. He and his girlfriend, Melissa Arnell, were under observation by two teams of officers from Scotland Yard's SO10 unit. But new information eliminated Mr Savva as a murder suspect. He is said to be considering suing the police for harassment.
The arrest of Mr Savva and another man on Thursday in east London is not believed to be connected to the Dando case. He was taken from the house he shares with his parents in Ilford to a central London police station.
Scotland Yard detectives had hoped the gun, found on Thursday on the shore of the Thames a mile from the murder scene, was the breakthrough they were searching for. But the weapon had a different calibre and different barrel to the gun used to kill Ms Dando.
The .32 Walther PP semi-automatic was found in a copy of The Express dated 24 November 1999 - seven months after the murder. The weapon used to kill the presenter was a .38 handgun.
Scotland Yard said the gun, found by a boatman on Thursday, had been "categorically ruled out" from the inquiry, but experts were examining it to discover if it had been used in another murder. It was found on the south side of the Thames near Putney Bridge in an area where a suspect was seen minutes after the murder.
The discovery that it was not the gun used to shoot Ms Dando is another blow to the 60-strong squad investigating the murder. Officers have been hampered by a lack of scientific evidence and, despite spending hundreds of thousands of pounds, have yet to establish a motive.Reuse content