The body of the victim, understood to be Jerry Hackett, a homeless man originally from Cork city, was discovered in the disused two-storey building in Midleton, Co Cork, on Sunday night.
His body may have been there for up to 48 hours. The gruesome discovery was made following an anonymous phone call to gardaí.
Just before lunchtime, gardaí confirmed a young man was helping them with their inquiries.
Local detectives and members of the Garda Technical Bureau from Dublin combed the building a former music school where the man was found, for clues yesterday.
They also searched the grounds and shrubbery alongside the swollen Owenacurra River looking for the murder weapon. An axe was later found at the scene.
Deputy State Pathologist Dr Marie Cassidy arrived at the scene yesterday afternoon to carry out a preliminary examination. She later carried out a full postmortem examination at Cork University Hospital.
The man leading the murder investigation, Supt Liam Hayes, confirmed that the victim had suffered "a
number of severe injuries to his body".
He said he believed the dead man had frequented the Midleton area on and off during the past few months.
It is understood he formerly stayed at the Simon Community in Cork city.
A phone box 500 yards from the murder scene was also cordoned off yesterday. Gardaí believe the anonymous call was made from it. Supt Hayes said gardaí were anxious to speak to anyone who was near the murder scene in the past 48 hours.
"If anybody saw anything suspicious we'd like to talk to them," he said.
Meanwhile, gardaí in Gurranebraher continue to investigate the October 7 murder of John Butler.
To date they have interviewed more than 300 people and say the inquiry is progressing.
A masked man gunned down Mr Butler in front of his partner as they walked home from a night out.