NYPD spokesman Paul Browne says charges are pending against the assistant, Natavia Lowery of Brooklyn. Browne says the suspect has "made statements implicating herself" in the killing.
The New York Daily News reported that Lowery, 26, was arrested in Virginia Beach, Va., and returned to New York for questioning.
Stein, who was bludgeoned in her $3 million Fifth Avenue apartment, was a pioneer in New York's punk music scene.
She was the ex-wife of Seymour Stein, the former president of Sire Records, which was the launching pad for the Ramones, Talking Heads and Madonna.
She co-managed the Ramones during the band's heyday and is credited with bringing the group to England.
After her death, friends like Madonna and Elton John recalled Stein's indomitable personality, and her triumph against breast cancer.
"I had a great visit with Linda and Seymour backstage after my show last year at Madison Square Garden, and we of course reminisced about the good old days," Madonna said. "I deeply admired her courage in her battle with breast cancer, as well as her career success."
Grammy-winning singer-songwriter Elton John was the godfather to Stein's daughter Mandy.
"I'm absolutely shocked and upset," John said. "She's been a friend for over 37 years and will be greatly missed. She did so much for breast cancer and was a huge supporter of my AIDS Foundation."
Other celebrity friends and clients included Sting, Billy Joel, Steven Spielberg and Angelina Jolie. She was among those at the epicenter of punk rock, becoming a fixture at the legendary CBGB.
"She was quite the character," said Meg Griffin, a Sirius Satellite Radio DJ who knew Stein from the late '70s. "She was a loud New Yorker, but endearing. She was one of those people who had their finger on the pulse of this music when it was in dingy, small clubs."
She fared well after changing careers. A real estate agent peddling a hot property to Charlie Sheen's "Wall Street" movie character was based on Stein.
Stein's body was discovered by Mandy, a documentary filmmaker who did the film "Too Tough to Die" last year about the late guitarist Johnny Ramone. She had another daughter, Samantha, and a 3-year-old granddaughter.
"She raised two wonderful daughters," Madonna said. "That was her best accomplishment of all."