The arrested accused have been identified as Zakir (29) from Savanoor in Haveri district and Mohammed Shafiq (27) from Bellare, Dakshina Kannada Superintendent of Police Rishikesh Bhagawan Sonawane said.
Police said the two accused are allegedly behind the conspiracy to murder Nettar.
Earlier, addressing reporters in Sullia taluk of the district, ADGP (Law and Order) Alok Kumar, who visited Bellare and took stock of the situation, said the probe is underway from all angles.
Kumar said six teams have been formed with the help of Mangaluru city police commissioner and Udupi police.
Praveen Nettar, 32, was hacked to death by unidentified motorbike-borne assailants at Bellare in Sullia taluk on Tuesday night. The Bharatiya Janata Yuva Morcha leader was running a broiler shop at Bellare near Puttur.
The killing led to tension and protests at several places in Dakshina Kannada district on Wednesday with instances of stone-pelting and police lathi-charge being reported.