Sater, a Russian-born onetime business associate of Trump's, described the concept as a "marketing ploy" and explained that the idea was to try to enhance the value and attraction for buyers by having Putin in the building.
BuzzFeed, which first reported on the plan, reported that Cohen, who was then-candidate Donald Trump's attorney, had discussed the idea with a representative of Putin's press secretary, citing two law enforcement sources. The penthouse was planned to be valued at $50 million but gifted to Putin, BuzzFeed reported.
It was not clear if Trump was informed of the idea.
Cohen would not provide a comment for the story.
Asked about the reporting on the idea of giving Putin the penthouse, Trump's lawyer Rudy Giuliani dismissed the idea that Trump was involved.
"The story is a story. The President never heard of this and the concept never got anywhere beyond an unfunded letter of intent and never even a proposal or draft contract," the former New York mayor said.
Earlier Thursday, Cohen pleaded guilty in federal court to a charge from special counsel Robert Mueller of lying to Congress when he testified about the proposed Trump Tower project in Moscow.
Cohen had previously said that talks on the project had ended in January 2016, but it was revealed Thursday that he had been discussing the project with Sater later into the 2016 presidential campaign.
As late as June 2016, according to prosecutors, Cohen and another man, identified in filings as "Individual-2," discussed efforts to gain Russian government approval for the project. Individual-2 is Sater, according to people familiar with the matter.
Cohen said Thursday that he had made the original statements "out of loyalty" to Trump.
"I made these statements to be consistent with Individual-1's political messaging and out of loyalty to Individual-1," Cohen said, identifying the President as Individual-1 in court Thursday.
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