"Today's arrest is just the next step in what has been a complex and thorough investigation by homicide squad detectives and one that is not yet over," Dean Thomas, the detective in charge of the investigation, told a news conference on Thursday.
Police will interview the woman, who has not been charged and whom they did not name, once the search is complete, he added.
State broadcaster ABC reported the woman had told police she did not intend to poison her guests and had herself been hospitalised after the lunch.
Deaths from consuming mushrooms are relatively rare in the country, which has several species, including the "death cap" mushroom, that are dangerous enough kill a human.
Reporting by Renju Jose and Alasdair Pal in Sydney; Editing by Lincoln Feast and Gerry DoyleOur Standards: The Thomson Reuters Trust Principles.
Persons:
Dean Thomas, Don Patterson, Gail, Heather Wilkinson, Ian, Renju Jose, Alasdair Pal, Lincoln, Gerry Doyle
Organizations:
SYDNEY, Police, ABC, Thomson
Locations:
Victoria, Leongatha, Melbourne, Australia, Sydney