A former Melbourne memorabilia dealer has admitted killing an "irrational and violent" graphic artist in 2001 before stashing the body in a wheelie bin.

The body of John Christianos, 40, was found in a storage facility 17 years after John Spencer White fatally shot him during a scuffle.

The victim's remains were only located in July 2018 when the Oakleigh South business closed down and the owner was clearing the premises.

The wheelie bin had remained onsite the entire time even though the killer stopped paying rent shortly after he'd stashed the body.

On Tuesday, White pleaded guilty to manslaughter in Melbourne Magistrates Court - his admission coming after prosecutors this week downgraded the charge from murder.

The court was told Mr Christianos had worked for White, painting images of well-known sports stars including Donald Bradman and Gary Ablett, which the killer then got autographed and sold at his store, Memorabilia Headquarters.

But on June 11, 2001, after the pair had been drinking at nearby hotel Zagame's, they returned to White's business premises and got into a scuffle when Mr Christianos became "erratic".

Mr Christianos was armed with a knife, and White got hold of a gun, firing it twice, in an "unlawful and dangerous act" that ended the artist's life.

When the storage facility owner discovered the body last year, he called White, who still had the same phone number.

Police then arranged an intercept on White's phone before visiting his Sunshine Coast home - which was filled with memorabilia including Gary Ablett photos and models of the Titanic - before extraditing the killer to Victoria.

Immediately after pleading guilty, White applied for bail, arguing he won't "do a runner" and was frightened as an older man in the prison environment due to violence.

"This man just needs a moment of quiet repose and reflection," his barrister Philip Dunn QC argued.

Magistrate Suzanne Cameron is expected to make a decision on White's bail application later on Tuesday.