Former abattoir worker faces court charged with murder of NSW teenager Michelle Bright, who vanished two decades ago

Homicide detectives have charged a former abattoir worker with the murder of 17-year-old school girl Michelle Bright, who vanished after a birthday party in tight-knit town of Gulgong more than two decades ago.

Craig Henry Rumbsy, 53, was a resident of Gulgong and lived two doors down from Michelle's family.

Michelle's body was found in long grass less than a kilometre from her home on February 30, 1999.

READ MORE: Michelle Bright knew her killer, heartbroken mum believes

By Christmas that year Mr Rumbsy had moved to the semi-rural suburb of Wilberforce and took up work at a local abattoir as detectives followed thousands of leads - many of which - had been thrown up by the local rumour mill.

Lorraine Bright describes her daughter as a "joy" and the "glue of the family" and says in her heart of hearts, she's always believed she would have known her killer.

Her brother Les Bright felt the same.

"I think she was offered a lift and I think it was someone that she knew...she wouldn't get in a car with someone she didn't know, " he told 9News last year.

At the time of Michelle's death in February 1996, police obtained DNA samples from 14 men and Rumbsy was one of them.

Following more than two decades of work from Mudgee detectives, and later the unsolved homicide squad, Rumbsy was arrested late on Tuesday night and taken to Mudgee police station.

After stepping out of a paddy wagon, 9News asked Rumsby if he murdered Michelle - to which he replied a firm "no".

When asked if he had anything to say to her family or mother Lorraine he replied, "I've known her mum for ages".

On February 26, Michelle vanished after being dropped outside the Commercial Hotel following a birthday party a few streets away.

A walker found her body in long grass near the train tracks on Barneys Reef Road three days later.

Police allege Rumsby nabbed Michelle and sexually assaulted her before killing her.

At the time Rumsby told police he never stayed or went to Gulgong on the night Michelle vanished.

He told detectives he played cards with a friend until 3am in the neighbouring town of Cooks Gap.

On Monday, detectives attached to Strike Force Mitcham II played their final hand, offering a million-dollar reward for information.

A video of the press conference was posted on the NSW Police Facebook page, prompting Rumsby to leave a comment.

"It's so sad that they havent caught her killer...Michelle was like a sister to me I feel sorry for the family," he posted.

Police also allege Rumsby sexually assaulted an 18-year-old woman at Gulgong a year before Michelle's death.

The woman told police a man had pinned her down outside her house, and tried to pull her dress up but was spooked by her boyfriend who chased after him but never caught up.

It's alleged Rumsby's wallet was found on the road near the attack.

On Wednesday afternoon, Michelle's family huddled together in the back seats of Mudgee Local Court but were not afforded a glimpse of his face as Rumbsy kept his head low.

He was formally refused bail and is expected to appear before the same court on August 19.