Cops had been searching for a man who they had described as a "person of interest" in the death of 21-year-old Osben Laparra, whose body has been found cut to pieces and placed in body bags that were dumped into the Bay.
Police said they'd located "Nacho" and had ruled him out as a suspect in the murder investigation.
Laparra was a Guatemalan immigrant who worked in Little Havana as a carpenter. He was last seen last weekend at a night club, but never returned home. The first bags containing his remains were found Wednesday.
Friends and family remembered Laparra as a hard-working man who stayed out of trouble.
"It's saddening, I just can't get over the fact that he's away, that he's not with us anymore," said friend Stephanie Suazo. "He was such a good person, we only have good memories of him. I just didn't believe that they had killed him that way."