The 26-year-old, identified in media reports as an Afghan national, confessed to putting the woman in a suitcase, but denied having killed her.
A 26-year-old man accused of the murder of a British woman whose body was found in a suitcase, attended a court in Athens on Wednesday to give his account.
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The suspect was arrested on Sunday, with police saying he "confessed to his actions".
"Officers of the Directorate for Combating Organized Crime have solved the homicide of a 38-year-old UK national, whose body was found inside a suitcase in an abandoned building in the Kypseli area on July 18," they said.
The woman, identified in media reports as Elisabeth-Jane Ross from Scotland, had come to Greece on 26 June and resided at a friend’s home in the Piraeus area until 10 July, at which point she departed for an unknown destination within the greater Athens area, they said.
"It emerged that the 26-year-old placed the body in a suitcase and transported it to the abandoned premises. Furthermore, in the days that followed, the 26-year-old used the victim’s bank cards to withdraw sums of money," the police said.
According to reports, the suspect said the victim was already dead when he found her.
Police said the suspect admitted that he put the woman into a suitcase but denied killing her. He is facing charges of intentional homicide, robbery and firearms offences.
Interpol authorities in the US helped identify the victim's fingerprints, and liaison officers of the United Kingdom National Crime Agency and Scotland police cooperated in the investigation.
"Despite advanced decomposition and adverse environmental conditions (investigators) managed to identify usable fingerprints belonging to the victim," the police said.