Taxi driver Zola Tongo, 31, claimed Shrien Dewani offered him 15,000 rand (1,300) to have 28-year-old Anni killed. Mrs Dewani was shot dead by gunmen a day later as she and her husband, also 31, were driven through Gugulethu township in Cape Town.
Tongo's claims formed part of a plea agreement drawn up with prosecutors at the Cape High Court, where he was jailed for 18 years for his part in the killing on 13 November.
Mr Dewani, from Westbury-on-Trym, Bristol, who has denied any involvement in his wife's murder, returned to England after the killing.
The dead woman's father, Viand Hindocha, struggled to contain his grief during yesterday's hearing and left the court with tears in his eyes.
Publicist Max Clifford, who has been acting on behalf of Mr Dewani, described Tongo's accusations as the latest in a string of false allegations against him.
In a statement, the Dewani family said: "Shrien is totally innocent of any involvement in this heinous crime.
"These allegations are totally ludicrous and very hurtful to a young man who is grieving the loss of the woman he loved, his chosen life partner.
"South African police have never sought to speak to Shrien regarding the allegations.
"Instead, two weeks have been spent negotiating this confession from the taxi driver while the two others accused have complained of torture and false confessions.
"Mr Dewani remains in the UK where he has been receiving medical treatment as well as trauma and bereavement counselling."
The court heard Tongo took the couple from Cape Town International Airport to the Cape Grace hotel, on the city's waterfront, on the day they arrived in South Africa.But once at the hotel, Mr Dewani asked Tongo to procure a hitman to have "a woman" killed, it was claimed.
Western Cape director of public prosecutions Rodney de Kock told judge John Hlophe: "The alleged hijacking was, in fact, not a hijacking but part of a plan of subterfuge which Shrien Dewani, the husband of the deceased, and the accused had designed to conceal the true facts, to wit that the deceased was murdered at the instance of her husband."
In his formal admission, handed to the court as part of the agreement, Tongo said he had been waiting for fares when Mr Dewani asked to be driven to the five-star Cape Grace hotel.
"After we arrived at the hotel, Shrien Dewani approached me alone and asked me if I knew anyone that could 'have a client of his taken off the scene'," Tongo said.
"After some discussion with him, I understood that he wanted someone, a woman, killed.
"He said he was willing to pay an amount of 15,000 rand. Shrien Dewani said he had US dollars and could pay in US dollars."
Later that day, the taxi driver claimed he spoke to a friend about arranging a hitman.
He was put in touch with Xolile Mnguni, 23, and Mziwamadoda Qwabe, 25, both from Khayelitsha, he said. The pair have also been charged in connection with the case.
The court heard that Tongo, from Bothasig, sent a text message to Mr Dewani as they drove through Cape Town, reminding him not to forget about the money.
A reply informed him this was stashed in an envelope behind the front passenger seat.
A spokesman for South Africa's national prosecuting office said an attempt to request Mr Dewani's extradition was "a matter that is likely to be considered" as part of continuing investigations.
"Based on what happened in court today, obviously the investigations are going to intensify," he said.