Ziad Takieddine, 62, was interviewed by a Paris judge in December, the Daily Mail reported.
He said most of the money was paid between December 2006 and January 2007, five months before Sarkozy came to power.
There have been similar claims from other witnesses, all of whom insist that Sarkozy was corrupt, the daily said.
French law bans candidates from receiving cash above 6,300 pounds or about $10,200, but it is claimed that Gaddafi's donations were laundered through bank accounts in Panama and Switzerland.
An Arabic language document made public in 2012 refers to Gaddafi approving an agreement to support Sarkozy's campaign for a sum of 50 million euros, the daily said.
The money was allegedly distributed through Takieddine, acting as a middle man between Arab leaders and French politicians.
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Gaddafi's son, Saif-Al Islam Gaddafi, also insists that Libya financed Sarkozy's election.
Muammar Gaddafi was honoured with a state visit to Paris in 2007. He was referred to as the "Brother Leader" by Sarkozy.
As head of state, Sarkozy could not be prosecuted while in office, but within weeks of him losing the election to Francois Hollande, his Paris home was raided by police.
Sarkozy earlier said the Gaddafi accusations were "grotesque".
Takieddine, worth more than 100 million pounds, has a number of homes across the world, including one in London, estimated at 17 million pounds.