Sickening footage aired by a Brazilian TV station shows the ruthless gunman pulling out his pistol in broad daylight and firing at his victim from close range.
The cold-blooded killer then calmly walks away from the scene as stunned pedestrians run to help.
The suspect has been named locally as Aderbal Ramos de Castro.
Brazilian cops said that the homeless woman had been asking for one Brazilian real, the equivalent of just 20cents.
She has been identified as 31-year-old Zilda Henrique dos Santos Leandro – known by her nickname of Neia – by other homeless people she lived on the streets with.
The incident happened in the early hours of Saturday in Niteroi, which lies across Guanabara Bay on the outskirts of Rio de Janeiro.
A Good Samaritan can be seen running up to Neia moments after she was gunned down and trying to flag down a car for help which failed to stop.
She was pronounced dead after being taken to a local hospital. She is thought to have been shot at least twice.
The alleged killer was filmed looking back as he walked down the street away from the scene.
Brazilian President Jair Bolsonaro, a former army captain, signed a decree in May allowing more people including truckers and politicians to carry weapons without having to prove why they needed them.
It was later watered down by lawmakers, who voted only in favour of giving weapons to certain people including hunters.
The new version of the bill has to be approved by Brazil’s Upper House before it becomes law.
Brazil already has one of the highest murder rates in the world.
Official data shows a fall this year in the number of violent deaths.
In the eight-month period to the end of August this year, there were 27,517 violent deaths – 7,900 less than from January to August 2018 – according to the official figures.