In a 15-minute appearance at Highbury Corner Magistrates Court, Michael admitted driving under the influence of drugs and possession of cannabis following the July 4 crash, where police say they found him "spaced out" and with dilated pupils.
Judge Robin McPhee banned the hitmaker behind "Faith" and "Father Figure" from driving for six months, and sternly warned he could face a prison sentence.
"It is a serious matter. Your driving was extremely poor and there was an accident," McPhee said, adding that Michael has already had one conviction.
Three years ago, Michael was found slumped over the wheel of his car, which was blocking an intersection.
Michael, 47, whose real name is Georgios Panayiotou, spoke only to enter his pleas and confirm his identity. The former Wham! lead singer needed help from police to get through a swarm of photographers and cameramen as he arrived at the court.
Police said they found the star in his car after it crashed into a Snappy Snaps photo shop in north London, near his home, in the wee hours of July 4.
The car's engine was still running when police arrived but Michael had to be roused, police said. They described Michael as appearing to be "spaced out," sweating profusely and having dilated pupils.
He pleaded guilty to driving while unfit. Tests showed he had taken a therapeutic quantity of an antidepressant as well as gamma-hydroxybutyrate, a so-called "date-rape drug" because it leaves people groggy and powerless.