The news was announced at a press conference held by police and the public prosecutor in the canton of Aargau on Friday afternoon.
The 33-year-old admitted the facts on Thursday, reported news agency ATS, giving a financial motive for the crime.
He may also have sexually abused one of the victims, said ATS.
The man, a student who lived in Rupperswil, was unknown to police and did not know his victims, the authorities told the press.
Considered one of the most serious crimes the area has ever seen, the murders have been the subject of intense investigations since the four victims were found dead in a house in the commune of Rupperswil in December 2015.
A 48-year-old woman, her 13 and 19-year-old sons and the 21-year-old girlfriend of the elder son were bound with cables and stabbed to death before the house was set on fire, according to information released at the time.
Investigators discovered that the mother had withdrawn large sums of money from two separate ATMs in the hours before she died.
A team of around 40 police officers interviewed more than a hundred people and examined DNA evidence, but their investigations proved fruitless.
In February police issued a 100,000-franc reward for information, one of the largest rewards ever offered in Switzerland.
At Friday's press conference police said the arrested suspect may have been planning other murders.