Tsunekazu Takeda was indicted on December 10 by investigating magistrates looking into a suspect payment of 2.8 million Singapore dollars ($2.3 million) made before the Japanese capital was chosen to host the Olympics, the source said Friday.
Tokyo beat Madrid and Istanbul in the 2013 vote.
Takeda, a former Olympic showjumper who led the country's campaign for the Games, said he had cooperated with a French judge looking into the matter, adding: "I was not involved in any wrongdoing such as bribery."
The 71-year-old, who is a member of the International Olympics Committee (IOC), added that "wrong information that I was indicted has been shared," and pledged he would "cooperate with investigations to clear up any doubts."
Takeda was "mis en examen" by the French magistrates, a legal step that has no direct equivalent in the American or British legal systems, but roughly translates as being charged.
It does not automatically trigger a trial, but it means that prosecutors believe there is strong or corroborated evidence of wrongdoing.
The French investigation, launched in 2016, relates to two payments made to Singapore-based Black Tidings, a firm linked to Papa Massata Diack, son of the Senegalese former head of the International Association of Athletics Federations (IAAF), Lamine Diack.
The younger Diack, formerly a marketing advisor to the IAAF, has been accused of accepting bribes.
The funds, labelled "Tokyo 2020 Olympic Game Bid", were paid from a Japanese bank account. The payments were made in two stages, before and after the IOC vote that decided the host city.
France is investigating the case because funds involved might have been laundered in France.
Shortly after accusations first surfaced, the Japanese Olympic committee appointed a three-man judicial panel to look into the matter. The panel reportedly cleared the campaign committee of any wrongdoing in September 2016.