About 80 people were being baptised when Pastor Docho Eshete lost his life on Sunday morning, at the lake in Arba Minch town's Merkeb Tabya district.
Lake Abaya is well known for having a large crocodile population.
While Dr Eshete was performing baptisms, a crocodile came out and killed him.
His body was later recovered from the water with bite marks on his back, legs and hands, according to local reports.
Members of his church failed in attempts to save him.
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Crocodiles tend to clamp their jaws down firmly when they bite, making it almost impossible for victims to escape, the Telegraph said.
Ultimately, they only managed to save Eshete's corpse from the crocodile - dragging it from the lake with fishing nets as the crocodile disappeared into the water. "All of a sudden, a crocodile jumped out of the lake and grabbed the pastor", an eyewitness told BBC Amharic.
It is likely that the crocodile that killed Docho was a Nile crocodile, the Independent reported.
The reptiles can grow to be up to six metres long and weigh as much as one tonne.
Conservationists say crocodile attacks are common throughout parts of Africa, where the animals live close to humans, according to the Telegraph.