Photographs from the crash site showed a scene of carnage with bodies thrown from the mangled wreckage of the workers' van.
"A bus from Prey Nokor (Ho Chi Minh City) overtook a car and crashed into a van transporting 39 garment workers, killing 16 of them on the spot," Cheang Am, governor of eastern Svay Rieng province, told AFP by telephone.
Two more workers died from injuries while en route to hospital in the capital Phnom Penh, Cheang Am said later, while 21 others were injured with several in a critical condition.
Cambodia's roads are notoriously dangerous with more than 2,000 people killed in traffic accidents last year.
Pav Sina, President of the Collective Union of Movement of Workers, said garment workers routinely travelled in overcrowded vehicles to save money.
"Every month cars transporting workers get into traffic accidents," he told AFP.
During a speech to graduate students, Prime Minister Hun Sen described the collision as a "big accident".
"I would like to share my condolences with the families of the victims," he said.
Svay Rieng is an eastern province on Cambodia's long border with Vietnam. The main road between Phnom Penh and Ho Chi Minh City runs through the centre of the province.
Cambodia's multi-billion dollar garment industry employs about 650,000 people in Cambodia and is a key source of foreign income for the impoverished country.
Cambodia exported a total of USD 5.7 billion worth of garments in 2014, up from USD 5.5 billion in 2013, according to Ministry of Commerce data.
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