While the other solutions are good, there are a couple of errors.
First, yes you do need to not be holding a weapon (or grenades). Select the hands by pressing Y and then down on the D-pad. Some solutions are saying right trigger to hit but after 10+ attempts, this did not seem to work. After looking up the control layout (Options, Controller Settings, Player Controls) it shows that for a strength melee, press and hold on the right joystick. First time I tried down on the right stick and got the achievement.
The confusion over a Strength punch might be why people are thinking this is buggy.
Also, the best place to get this is Awakening at the coal mines. I followed the tracks and went behind the buildings. climbed 2 sets of ladders, crossed to the next building on the grain belt and jumped onto the catwalk that has the chain gun. At the bottom of the stairs there is a nanosuit enemy that patrols the front catwalk turning just at the stairs. If you go down the stairs cloaked, you can take him by surprise with one or two Strength punches. Very easy and no shooting required once you get to the building (assuming that you keep in stealth).