Australian police have arrested two men for the murder of a Sydney grandfather they say was mistakenly kidnapped, a day after human remains were found.

Widower Chris Baghsarian, 85, was abducted from his North Ryde home in a pre-dawn raid on 13 February.

Police say he was not the intended target of the alleged attack, which local media have reported may have been aimed at a family with links to organised crime.

On Wednesday, two men, aged 24 and 29, were arrested at two separate homes and taken in for questioning - less than 24 hours after police found a body they believe to be Baghsarian near a golf course on the city outskirts.

No charges have been laid, police said.