But one of the men has been charged by a second group of detectives over a series of assaults unrelated to the shooting.
Two men, a 25-year-old and a 60-year-old, both from Altona North, were arrested after the man was killed around 11am (AEST) in Williamstown on Monday.
It is believed the two arrested men and the dead man, who has not yet been identified, are associates of the warring Haddara and Chaouk families.
Police are investigating whether the shooting is part of a series of tit-for-tat shootings between the rival Lebanese clans.
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Last month, the patriarch of the Chaouk family, 65-year-old Macchour Chaouk, was gunned down in the backyard of his home in suburban Brooklyn, a few kilometres from Williamstown and Altona North in Melbourne's west.
Police interviewed the men through the afternoon and evening.
A Victoria Police spokeswoman said homicide detectives released the older man without charge.
Homicide detectives released the younger man pending further inquiries, but he was handed to members of the Santiago taskforce investigating unsolved shootings in Melbourne.
He later faced an out-of-sessions hearing on "various assailed charges not related to the Williamstown shooting", the spokeswoman said.
The man, who has not been named, was remanded in custody to appear before the Melbourne Magistrates' Court on Tuesday.
Media closed out of hearing
The hearing was closed to the media for operational reasons, the spokeswoman said.
The name of Monday's victim has not been released but police sources have told AAP they believe he is an "associate" of the Haddaras and Chaouks aged in his 30s.
It is understood he could not be immediately identified after being hit in the head with a single shot from a long-arm firearm.
Those arrested were also connected to the two families but associates of the families often changed their allegiances, the source said.
Homicide squad detective John Potter said police were investigating whether the shooting was connected to the two families.
"I am unable to confirm whether this is a payback. I can say that it's one option that we are looking at," Det Potter told reporters.
Police are trying to determine if the victim was shot with his own gun after a struggle.
Police say both arrested men worked in the area, while the victim had arrived at Block 2 of the industrial estate, across from a self-storage facility, for a meeting with someone.
