The agreement, for which talks started late last year, covers sectors that include trade, tourism and agriculture, under which both countries will cut duties for their products.
The signing was attended by the Chinese government's top diplomat, State Councillor Wang Yi and Cambodian Prime Minister Hun Sen at a ceremony streamed online.
"The signing of the agreement signifies even stronger ties between the two countries and marks another key historical milestone for Cambodia China relations," Cambodia's Commerce Minister, Pan Sorasak, told the ceremony.
The agreement, which he said he hoped would come into effect early next year, "would provide a more robust economic partnerships through a higher degree of market access, liberalisation for goods, services and investment," he said.
There were no details provided about the agreement and it was not immediately clear how it would work with existing trade arrangement between China and the Association of South East Asian Nations (ASEAN), of which Cambodia is a member.
Depending on its terms, the deal could be a boost for Cambodia, which suffered the suspension last year of part of its special trade preferences with the European Union, a key market for its exports, over human rights concerns.
That included re-imposing tariffs on certain garments and footwear, which are central to manufacturing jobs and its economy.
Cambodia, which is among Asia's poorest countries, has been an important ally to China in recent years and has been accused of giving it de facto veto power in ASEAN's consensus-based decision making process in return for economic support.
Cambodia has rejected that and insisted its foreign policy is not under China's influence.
(Additional reporting by Lusha Zhang and Ryan Woo in Beijing; Editing by Martin Petty)
By Prak Chan Thul