Mediapart, a French online magazine, claimed in its report to have a Gadhafi government document, detailing an agreement to fund the campaign. The alleged document, dated December 10, 2006, states that then-Libyan intelligence chief Moussa Koussa authorized secret payments to Sarkozy through an intermediary, Mediapart reports.
CNN was not immediately able to confirm the authenticity of the published document.
Sarkozy has dismissed the allegation as "grotesque."
During a television interview aired by TF1 last month, Sarkozy addressed the accusation, which has surfaced periodically since at least last year: "If (Gadhafi) had funded (my campaign), frankly, I would not have been very grateful," he said.
France supported the 2011 NATO intervention in Libya that helped to topple the longtime leader. Gadhafi was ousted, then was fatally wounded in a gunbattle that broke out after his capture on October 20. His son and one-time heir apparent Saif al-Islam Gadhafi was captured by Libya's new authorities and is awaiting trial.
During a televised interview with Euronews in March 2011, after France recognized the National Transitional Council as the legitimate authority in Libya, Gadhafi's son claimed Libya contributed to the Sarkozy campaign.
"The first thing we want this clown to do is give the money back to the Libyan people. He was given assistance so he could help them, but he has disappointed us," Saif al-Islam Gadhafi said.
The deposed Libyan leader's son then claimed that Libya had "all the bank details for the transfer operations." Despite pledging to make these transactions public, the Gadhafi regime, before and after its downfall, never produced any evidence it financed the Sarkozy campaign.
"When one quotes Mr. Gadhafi, who is dead, or his son, who is standing trial, the credibility is zero. And when you drag up their accounts with these questions you are asking, you quite degrade this political debate," Sarkozy said in the TF1 interview.
But Hollande's campaign is calling for the president to come clean.
"The fact that these revelations take place within days of the second round of the presidential election is not sufficient to demonstrate that they are 'grotesque.' It is now up to justice to reveal the truth: Either establish the facts and prosecute, or otherwise provide proof that these are false allegations," said Hollande spokeswoman Delphine Batho.
French records for the 2007 presidential election show that the Sarkozy campaign declared 21.3 million euros ($28.2 million) in contributions it received, according to the National Commission for Campaign Accounts and Political Financing, the French government body that monitors and records campaign financing.
Hollande and Sarkozy face a runoff vote for the presidency on May 6. Sarkozy, who leads the center-right UMP party, received 27.2% of the vote in the first round of voting, just behind Hollande's 28.6%. Hollande is a member of the center-left Socialist party.
If elected, Hollande would be France's first left-wing president since Francois Mitterrand left office in 1995. Sarkozy has been president since 2007.
The two contenders are expected to take part in their first head-to-head televised debate on Wednesday.