Darko Mrdja made his confession at a special hearing at The Hague war crimes tribunal on former Yugoslavia on Thursday.
The 36-year-old former metal worker said he took part in the shootings by a special Bosnian Serb police unit of at least 228 prisoners in Mount Vlasic.
The Bosnian Muslim and Croat victims, who had been told they would be released in a prisoner exchange, were driven from the notorious Trnopolje detention camp to woods by a ravine where they were forced to kneel to be shot by the edge of a cliff.
A dozen men survived the massacre by tumbling or jumping down the cliff.
The massacre was part of the wave of ethnic cleansing that gripped Bosnia during the three year war which left thousands dead.
Mrdja had entered a not guilty plea to three counts of crimes against humanity and war crimes following his arrest in June last year.
He then changed his plea to guilty to two counts of murder and inhuman acts. "I'm guilty of counts two and three," Mrdja told the tribunal.
But a third charge of extermination was withdrawn against Mrdja under a deal with the prosecution, which is seeking a sentence of between 15 and 20 years in jail.
Mrdja is expected to be sentenced later this year.
Mrdja was seized by NATO-led troops last June under a "sealed" or secret indictment used by the tribunal to prevent suspects knowing they are wanted by the court and going into hiding.