Peter Foster says John Chardon made a jailhouse confession to shooting and killing his wife Novy because he didn't want her getting half of his business.
The convicted conman made the explosive claims on the opening day of the Gold Coast businessman's committal hearing on Wednesday.
He also claimed police told him Chardon's daughter was trying to hire a hitman to kill him.
Foster told the Brisbane Magistrates Court he was a police informant in the jail where the pair were incarcerated in 2015 when Chardon made the admission.
While referring to notes he made while they shared a cell, the notorious conman claimed the accused murderer also told him how he disposed of her body in 2013.
"By this stage he's told me how he's killed her, he's told me how he shot her, told me about the gun and all that," he said.
Foster said he asked Chardon why he did it.
"I think he says: 'I've worked 25 years or more to build the business up, why am I going to give half to that whore?'," he said.
The court also heard Foster was the one who contacted police about Chardon, who was in custody on other matters, after he saw a TV broadcast about a search for Novy's body.
He claimed after telling Chardon about the segment, the accused killer said, 'well they won't find her there', before he got his lunch and called his lawyer.
Foster agreed to become a police informant and moved into Chardon's cell for six weeks.
The court heard as part of the conditions of the deal he asked investigators for a listening device because he didn't think anyone would believe his account.
Foster claimed after living with Chardon for just a few days he was "1000 per cent convinced" he had killed his wife.
"I think he's a very troubled man and I believe he murdered his second wife," he said.
"I would wager that he killed his first wife but I have no evidence on that."
Foster, who is on remand in a NSW jail, repeatedly denied there had been anything in it for him in exchange for his help.
He claimed instead he was trying to do the right thing for a change and that someone needed to speak up for Novy.
But he conceded he asked himself as recently as Wednesday morning if he was risking his life by giving evidence.
"The reason I say that ... is the Queensland police came to me two years ago and said they had intel Mr Chardon's daughter was trying to get a hit man to kill me and did I want witness protection?" he claimed.
Foster said whenever he had questioned his involvement in the case he thought about what his idol, rugby league coach Wayne Bennett, would do.
"Coach Bennett would say 'you tell the truth and you do your civic duty' and that's why I'm here," he said.
Novy, who was 34, was last seen at the pair's northern Gold Coast home on February 6, 2013.
Her car was found at Nerang train station a few days later, but despite extensive searches and a $250,000 reward, her body has never been found.
The hearing is expected to continue on Thursday.