Chinese police have arrested a man who has been on the run since allegedly hacking a family of six to death 25 years ago, state media reported Sunday.

The suspect, identified as Guo, murdered the family with an axe after a dispute "over trivial matters" in March 1991 and has reportedly confessed to the crime, Xinhua news agency quoted local police as saying.

Guo said the killings were an act of revenge after his own wife was sexually harassed by a man from the family, according to the official Life Daily.

He was quoted by the newspaper as saying he "entered the courtyard in the early morning, saw a woman in the bathroom and killed her with an axe before attacking five other people".

The oldest victim was in his 80s and the youngest was 11, Life Daily added.

According to police, Guo said he "hasn't had a good night's sleep in more than 20 years on the run, often waking up with a start with sweaty palms", Life Daily reported.

Guo, who was convicted of rape before the 1991 murders, fled several thousand kilometres to Shandong province in China's east after the murders in the northeastern province of Heilongjiang.

He then headed to Xinjiang in the northwest, on the other side of the country, where he worked odd jobs.

Guo was finally arrested in Xinjiang after investigators discovered a mobile phone registered in the area under his wife's name.

The case is still under investigation, according to Xinhua.