Police were called to the Footscray business just after 8pm on Friday to carry out a welfare check.
When they arrived, a 62-year-old Footscray woman was found dead inside a home operating as the 149 Rainbow Garden adult entertainment club.
She was allegedly killed in the early hours of last Wednesday morning.
Police spent Saturday scouring the property and a car parked outside for evidence.
They arrested a 35-year-old Footscray man at his home this afternoon, interviewed him and charged him with murder.
The man is due in Melbourne Magistrates’ Court tomorrow.