The 43-year-old, who runs a civil services examination guidance centre in suburban Kandivli, is the fourth accused to be arrested in the case in which a minor has also been detained.
Waghmare had a personal enmity with Sawant on various issues and allegedly planned his murder, he added.
According to another police official, the 62-year old former corporator had stopped Waghmare's "sources of earning". Waghmare had filed some RTI applications about construction activities in the suburbs.
Angered over Sawant's behaviour towards him, Waghmare hatched a conspiracy with other accused persons to kill the politician-cum-businessman, he said.
Waghmare was the one who kept on eye on Sawant's movements on the fateful day and also harboured the accused who later took part in the crime, the official said.
According to the police, the vehicle used in the crime has been seized.
The two-term corporator from Samata Nagar in Kandivli, was attacked with cleavers at around 11 pm on January 7 while he was returning home after meeting a friend.
Sawant, who had entered the cable television business a few years ago, was rushed to a nearby hospital, where he was declared dead on arrival, police have said.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)