Ms Baloch, who had become a social media celebrity in recent months, stirred controversy by posting pictures taken with a prominent Muslim cleric.
She was found dead at her family home in the central city of Multan on Saturday.
Police arrested her brother, Waseem Azeem, and presented him before the media in Multan, where he confessed to killing her. He said people had taunted him over the photos and that he found the social embarrassment unbearable.
“I was determined either to kill myself or kill her,” Azeem said as he was being led away.
He said that even though Ms Baloch was the main breadwinner for the family, he slipped her sedatives the night before and then strangled her in her sleep.
“Money matters, but family honour is more important,” Azeem said.
Nearly 1,000 women are murdered in Pakistan each year for violating conservative norms on love and marriage. The so-called “honour killings” are often carried out by family members.
Such killings are considered murder, but Islamic law in Pakistan allows a murder victim’s family to pardon the killer, which often allows those convicted of honour killings to escape punishment.
Regional police chief Sultan Taimuri said authorities will seek the maximum punishment for Azeem, without providing further details.
Ms Baloch, whose real name was Fauzia Azeem, was buried yesterday. She had shot to fame and notoriety through social media postings that would be considered tame by western standards but were seen as scandalous by many in deeply conservative Pakistan.
A video of her dancing to a popular rap song was widely circulated, and at the time of her death she had 40,000 followers on Twitter and 700,000 on Facebook.
In postings and public comments, she presented herself as a symbol of female empowerment.