Samuel Carson, 91, died after a blaze in the garage of a house at Thorndale Park, off the Hillsborough Road, caused his home to go up in flames.
Karen Hasson, 58, of Thorndale Park, Carryduff, pleaded guilty to a charge of manslaughter.
A psychiatric report will be obtained ahead of sentencing in May.
The case had been listed for mention at Downpatrick Crown Court but a defence lawyer asked the judge for Ms Hasson to be re-arraigned on the first count of manslaughter.
When the charge of killing Mr Carson was put to her she replied "guilty".
A prosecution lawyer told the court: "The guilty plea is acceptable to the Crown. The two remaining counts of arson endangering life with intent and arson endangering life are to be left on the books and not to be proceeded with without the leave of this court or the Court of Appeal.''
Ms Hasson was released on continuing bail.
No details of the charge were given in court on Wednesday but at a previous hearing a court heard that pensioner Samuel Carson had been asleep in bed at his Carryduff home in the early hours of 2 September 2014 when a fire in the garage of a neighbouring house in Thorndale Park spread to his adjacent Hillsborough Road home.
At the time it was reported that the garage blaze spread to Mr Carson's oil tank, causing the pensioner's bungalow to go up in flames.
Firefighters rescued Mr Carson from his home but efforts to revive him failed and he was pronounced dead at the scene.
A County Down woman has admitted killing her elderly neighbour who died following a fire at his Carryduff home.