Dozens of ambulances with their sirens blaring raced to the scene of the tragedy, which occurred late Monday on a narrow bridge to an island in Phnom Penh where festivities were being held to mark the end of the annual event.
At least 339 people died in the incident, Prime Minister Hun Sen said on television.
"With this miserable event, I would like to share my condolences with my compatriots and the family members of the victims," he said.
Hun Sen said the government would arrange for the bodies of out-of-town visitors to be sent home.
It was not immediately clear exactly what triggered the stampede.
"This needs to be investigated more," Hun Sen said, adding that a committee would be set up to examine the incident.
Witnesses reported people pushing and shoving in the crowd.
"We were crossing the bridge to Diamond Island when people started pushing from the other side. There was lots of screaming and panic," 23-year-old Kruon Hay told AFP at the scene.
"People started running and were falling over each other. I fell too. I only survived because other people pulled me up. Many people jumped in the water," he said.
Sunglasses and flip-flops were left scattered on the ground among lifeless bodies.
Police were seen carrying away some of the victims and bodies were laid in a row on the ground. Many of the dead appeared to be young Cambodians.
"This is the biggest tragedy we have ever seen," said Sok Sambath, governor of the capital's Daun Penh district.
Dozens of people gathered outside the city's Calmette hospital, where at least 105 people were confirmed dead, according to a police officer.
More bodies were taken to other hospitals across the city, he said.
Many festivalgoers were left in tears after the tragic end to the three days of boat races, concerts and fireworks.
The annual festival, one of Cambodia's largest and most exuberant, marks the reversal of the flow between the Tonle Sap and Mekong rivers.
It is also seen as a way of giving thanks to the river for providing the country with fertile land and abundant fish.
The event -- which saw hundreds of brightly coloured boats take part in races on the Tonle Sap river -- is popular with tourists but there were no immediate reports that foreigners were among the victims.
