Eric Holder, 29, had been on the run after fleeing the scene of the shooting in a waiting car, Los Angeles Police Department said.
Hussle, 33, was gunned down outside his clothing store in Los Angeles on Sunday.
Investigators believe the shooting was the result of a “personal matter” between Mr Holder and Hussle.
Los Angeles Police Chief Michel Moore told reporters the suspect had a verbal altercation with the rapper.
Mr Moore said at one point the suspect left but them came back with a gun and opened fire.
Surveillance footage shows a man in a dark shirt firing at least three times before fleeing, TMZ reported. Two other people were wounded in the shooting