Oeuth Ang, who goes by the name “Chuob Samlab” (Meet to Kill), admitted the killing, saying it was over money.
Rights groups believe Kem Ley was probably killed for his outspoken criticism of the government.
Assassinations of high-profile activists are not uncommon in the country.
Over the past two years a growing number of anti-government campaigners and politicians have been prosecuted on what they say are trumped-up charges, says the BBC’s South East Asia correspondent Jonathan Head.
Hun Sen, who has ruled Cambodia for more than three decades, is accused of increasingly authoritarian rule.
The country has also pushed through legislation allowing political parties to be dissolved if their leaders have criminal convictions, a measure critics believe is intended to ensure Hun Sen’s party wins the coming general election, due next year, our correspondent adds.