"He was at the end of the phone line during the auction and had a friend there for him."
The singer has said he will keep the piano in the UK, raising hopes it could be returned to the Beatles' Story museum in Liverpool, where it has been the star attraction for the last several months.
A spokeswoman for Michael said: "He's just so excited to have got it at the moment that we don't know what will happen to it.
"He feels it's a piece of history and he wants it to stay in the UK.
"He was at the end of the phone line during the auction and had a friend there for him."
Shelagh Johnston, the museum's curator, told BBC News Online she was now hoping for a call from the star.
"We have not heard anything and we are waiting by the phone," she said.
The Sun newspaper reported that Michael outbid fellow stars Robbie Williams and Liam and Noel Gallagher for the famous musical instrument.
Ms Johnston added: "The bidder's representative came up and shook our hands after the auction and was all smiles.
"It was a real confidence boost."
The hammer price for the piano was £1.45m but Michael will pay an extra 15% commission to auction house Fleetwood Owen, bringing the total to £1.67m.
Before the auction Ms Johnston said she feared that buyers from the US or Japan would dominate the bidding.
"The Beatles' Story would love to be able to bid for the piano, but we are a privately-run museum and it is completely out of our league," she said.
'Huge loss'
She has said she would offer to house and insure the piano in Liverpool at the museum's expense.
Liverpool City Council's tourism chief, Keith Davies, pledged his support for the museum, saying it would be a "huge loss" for the city if it lost the piano.
The piano was bought by Lennon in December 1970, and delivered to studios at his home in Tittenhurst Park in Berkshire.
He composed and recorded Imagine on it, and was filmed playing the song on it for the first time to wife Yoko Ono and the Plastic Ono band.
In 1992, it was bought by a private British collector who agreed to let the Beatles' Story house it for 10 months this February.
The auction was organised by Fleetwood Owen, a venture set up by musician Mick Fleetwood and auctioneer Ted Owen.
Other items included a Hammond C3 organ used by Lennon in his studio which fetched the expected price of £40,000.
A Ferrari owned by Lennon, which was restored by Dodi Fayed, was also put up for auction by Mr Fayed's father Harrods owner Mohammed al Fayed. It fetched £110,000.
And a pair of Lennon's wire-rimmed glasses believed to have been worn by the artist when he composed Imagine - and were broken in an argument between him and his then wife Yoko Ono - fetched £6,000.