The PSNI Legacy Investigation Branch has arrested a 54-year-old man in connection with the murder of James Gibson in 1982 in the Coalisland area.
He had stopped his Ulsterbus to let children on when a masked IRA man opened fire.
A witness said all children on the bus were left “in hysterics”.
A minister said at his funeral: “He was helping Catholic children find their way home from school on that cold December day. Let that be his epitaph”. He had left the UDR two years previously.