David Watkins admitted knifing Josh Price five times when they met to complete a cannabis deal.
The defendant accepted neither he nor Jake Henson, the close friend who accompanied him to the rendezvous, had any money to pay for the drugs he had ordered.
Watkins told Wolverhampton Crown Court: "The voices told me to rob him and I decided to do that. I told Jake what I was going to do as we went to meet Josh. Jake didn't say much. I was having hallucinations.
"Josh gave me the cannabis. I put it in my pocket and said: 'I am keeping this.' He said: 'No you ain't' and pulled a blade on me. I was panicking. The voices were saying I was going to die.
"I grabbed his hand. I think I punched him in the face. The voice said 'he is going to kill you'. I thought I was throwing punches."
Mr Paul Lewis QC, defending, interjected: "But you were not. You accept you stabbed Josh five times." Watkins continued: "It was me that stabbed him. I just wanted to get out of there as quickly as I could. Jake didn't touch him."
He admitted that the pair returned to the dying man seconds after cycling from Treynham Close, Stowlawn and Henson took something from 21-year-old Mr Price, who was later certified dead at the scene.
The prosecution maintain Henson took the stabbed man's phone on which the fateful meeting had been arranged through calls and text messages with Watkins. It was never found.
Watkins said: "As I rode off I realised I had the blade in my hands and took it with me. The voices kept telling me to get rid of it."
He threw the knife and his bike into the canal and also admitted changing his clothes at a 'mates' house before returning to his nearby home. The defendant further conceded that he sold his phone but could not remember why.
Watkins had stopped taking medication prescribed to silence the voices in his head and halt hallucinations of 'demon' shadows which were allegedly tormenting him.
He said he was relying on a £10-a-day cannabis habit to resolve the mental problems and had been buying drugs from Mr Price for a couple of months before the stabbing which occured on September 27 2014.
Mr James House QC, prosecuting, told the jury Mr Price was deliberately lured to his death by Watkins and 21-year-old Henson but the motive was unclear. He concluded: "It was Watkins who wielded the knife but both defendants were in it together."
Watkins from Clem Attlee Court, Park View Road, Stowlawn, and Henson of Wellington Road, Bilston, both deny murder and the trial continues.