The claim, made by a youth from Benghazi identified as Sanad al-Sadek al-Ureibi, added fuel to growing speculation over how Gaddafi died on Thursday.
It also seemingly contradicted claims by Libya's ruling National Transitional Council that Gaddafi was shot in the head when he was caught "in crossfire" between his supporters and new regime fighters soon after his capture.
On the video, Ureibi, said to have been born in 1989, is shown being interviewed by a number of unidentified men, some of them wearing military fatigues, who are congratulating him.
They showed to the camera a gold ring and a bloody jacket allegedly belonging to Gaddafi, with the ring being engraved with the name of Gaddafi's second wife, Safia, and the September 10, 1970, date of their marriage.
"I fired two bullets at him, one hit under his armpit, the other his head. He did not die immediately. It took him half an hour," he said.
He described being separated from members of his brigade in Benghanzi and his decision to join fighters in Misrata when new regime forces assaulted Sirte, Gaddafi's hometown.
"We came across Gaddafi in a street, as he was walking with some children and girls."
"He was wearing a hat. We recognised his hair, and a fighter from Misrata said to me, 'That's Gaddafi; let's get him'."
Ureibi said he neutralised the ex-Libyan leader, who was carrying a gold pistol, by grabbing his arms.
"I slapped him. He said to me 'you are like my son". I slapped him a second time. He said, 'I am like your father". Then I grabbed him by the hair and put him on the ground."
He said he wanted to take Gaddafi to Benghazi, but when Misrata fighters insisted on taking the fallen leader back to their city, he decided to open fire and shot Gaddafi twice.
He said the Misrata fighters confiscated his pistol and threatened him with death if he returned to Libya's third city.