Mr Masara said the CIO wanted to kill Mr Nyarota in order to silence the Daily News because "it had become a formidable opponent of the government".
The would-be assassin, Bernard Masara, changed his mind after meeting the editor, Geoffrey Nyarota, in a lift and decided to reveal the plot.
Mr Masara demonstrated the plan's authenticity to the paper's editors by telephoning his handler in front of them and discussing details of the planned killing.
A bomb exploded outside the Daily News offices during the violent run-up to June's elections and independent journalists have been tortured and received death threats.
Mr Masara said the CIO wanted to kill Mr Nyarota in order to silence the Daily News because "it had become a formidable opponent of the government".
Authentic details
Mr Nyarota says he is convinced details of the plan are authentic.
"There is no doubt whatever this is a genuine plot" he said.
Mr Masara decided he was unable to go through with the plan when Mr Nyarota asked after his health as they rode in a lift together.
"I realised he was different from the man that had been described to me," the paper reports him as saying.
After making an appointment to see the paper's editors Mr Masara revealed the plan and telephoned members of the CIO to discuss the details as the editors listened on the telephone's speaker.
Mr Masara claims he and four veterans of Zimbabwe's independence war were hired to carry out the assassination.
He says they operated out of offices belonging to the ruling Zanu-PF party in Harare.
Ruling party denial
A spokesman for Zanu-PF said he had absolutely no knowledge of the matter and it had nothing to do with Zanu-PF.
The Daily News was launched in 1999 and claims now to sell twice as many copies as the state-run Herald newspaper.
It backed the opposition Movement for Democratic Change (MDC) during the recent elections.