They said on Friday the information came from Buhary Syed Abu Tahir, named by US President George Bush as "deputy" to Khan in an international nuclear trafficking ring.
In a detailed insider's view of the proliferation scandal, Tahir told police Khan had asked him to send centrifuges to Iran in 1994 or 1995, according to an official report which will be handed to the International Atomic Energy Agency (IAEA).
Two containers of used centrifuge units - which can be used for enriching uranium for nuclear weapons - were shipped from Pakistan to Iran via Dubai and were paid for with about $3 million in cash, Tahir said.
"The cash was brought in two briefcases and kept in an apartment that was used as a guesthouse by the Pakistani nuclear arms expert (Khan) each time he visited Dubai," according to the report.
Tahir also said Khan told him that a "certain amount of UF6 (enriched uranium) was sent by air from Pakistan to Libya" around 2001.
Khan, a national hero credited with making Pakistan a nuclear power, confessed this month to leaking nuclear secrets. He was later pardoned by President Pervez Musharraf.
The latest revelations in the scandal were made in a 12-page police report on investigations into an alleged Malaysian link to the nuclear weapons black market and the role of Tahir, a Sri Lankan businessman married to a Malaysian.
Pakistan's Abd al-Qadir Khan has
admitted selling nuclear secrets
According to the report, Tahir and Khan met Libyan representatives named as Muhammad Matuq Muhammad and Karim in Istanbul in 1997 when the Libyans asked for centrifuge units.
Between 1998 and 2002 several more meetings were held, one in Casablanca and others in Dubai.
The enriched uranium was sent from Pakistan to Libya by air around 2001, and "a certain number of centrifuge units were sent in 2001-2002".
The report recommends that the IAEA should launch investigations into "several individuals from Europe allegedly involved in the proliferation of nuclear weapons".
Tahir named a Swiss citizen, Urs Friedrich Tinner, as being "actively involved in the manufacturing operations" of the Malaysian factory which was the subject of the police probe.
US and British intelligence services had told Malaysia that centrifuge parts manufactured by a local company, Scomi Precision Engineering (SCOPE), had been found on a ship bound for Libya last October.
Prime Minister Badawi: Son was
cleared of 'knowing involvement'
The Malaysian company admitted making the parts - which were ordered by Tahir - but said it believed they were for use in the oil and gas industries and did not know their final destination.
The company is owned by Prime Minister Abdullah Ahmad Badawi's son Kamaluddin. But Malaysia has strenuously denied that either the company or the country was knowingly involved in the nuclear arms black market.
The report clears SCOPE of breaking any laws, saying the company was unaware that the components were part of a centrifuge unit for Libya as Tahir and Tinner did not declare "the true nature of the business".
The report made no mention of whether any action would be taken against Tahir.