Lance-corporal Tyler Jackson said he agreed to go along with the plan to kill an Iraqi man they believed had been involved in attacks on marines during a patrol near the village of Hamdania.
He told a court-martial at the Camp Pendleton marine corps base north of San Diego: "Everyone there verbally agreed. Not much more was said."
Jackson pleaded guilty to charges of aggravated assault and conspiracy to obstruct justice. Joseph Lisiecki, the judge, accepted the guilty pleas and set the sentencing hearing for November 16.
Earlier in the hearing, Jackson pleaded not guilty to murder, kidnapping, larceny, housebreaking and another charge of conspiracy. Those charges were later dropped as part of his plea deal after he gave his account of the murder.
He could face up to 15 years in prison but under a pretrial agreement with military prosecutors, he is expected to receive a lesser punishment in exchange for his cooperation and testimony against five other members of his squad.
Unit members have testified that the plan was to capture Saleh Gowad, whom they suspected participated in attacks against the marines, including a roadside explosion that killed four members of their unit.
That night, four of the men grabbed not Gowad but another man in the village, tied him up, dragged him to a hole in the road, and then all eight of the men fired their weapons at the man, Jackson said.
He said he went along with the plan to kill Gowad because he agreed with it.
According to his testimony, only later did Jackson realise that they had actually grabbed and killed another man, Hashim Ibrahim Awad, a 52-year-old former policeman.
Jackson said he got in line at the sergeant's behest and fired, but aimed above the man's head.
He told the judge: "I knew he was going to be shot. I didn't want to be the one doing it."
He said the eight men agreed to stick to the story that he was shot after getting into a firefight with the marines.
"We would tell the story that the man was digging an IED along the road," he said, referring to a bomb known as an improvised explosive device. If they were ever questioned, they would say "it was a good shot, a lawful engagement," he added.
Jackson is one of seven marines and a sailor with a platoon belonging to 3rd Battalion, 5th Marine Regiment, an infantry unit based at Camp Pendleton, charged in Awad's death.
In addition to the sailor, Jackson is the second marine to plead guilty in the case.
The five others face charges including premeditated murder.