Masaki Kimura, 39, admitted that he had been paid 1 million yen ($8,500) by a breeder to dispose of the miniature dachshunds, toy poodles, and corgies.
He gave them no food or water, Jiji Press reported, and all but eight of the animals died in the wooden crates he was using to transport them, initially with the intention of selling them.
When he discovered so many had perished, he decided to dump them in isolated parts of Tochigi, north of Tokyo.
"I took the dogs from an acquaintance who said they would quit breeding, receiving 1 million yen from the person," Kimura told police, according to the Mainichi Shimbun newspaper.
"The dogs died when I was transporting them by truck after putting them inside wooden boxes," he was quoted as saying.
Police began investigating after the rotting bodies of dozens of dogs were found at two different spots — a riverbed and a forest — earlier this month. Kimura handed himself in at a police station last week, telling officers, "I regret what I've done," media reports said.
A spokesman for Tochigi police told AFP he was being questioned on suspicion of violating laws on animal rights, river management and waste disposal.
Small dogs are popular pets in Japan, but the issue of animals abandoned by their owners frequently makes the news.