The government is saying the Senate President himself wrote a letter in 2015 to stop the payments.
The Socio-Economic Rights and Accountability Project (SERAP) had recently accused former governors, who are now senators or ministers, of receiving double pay from government by accepting pensions from their former jobs in addition to the salaries in their new positions.
Saraki has been under the most spotlight from the allegations which he has thoroughly denied, saying the payments stopped after he personally requested it of his own volition.
The Kwara state government has backed his claim, saying Saraki himself wrote a letter to the state government in 2015 to stop the payments.
This was disclosed in a press release by the Secretary to the state government, Alhaji Sola Isiaka Gold.
In a bid by the state to clarify its position on the issue, he said, "Dr Saraki, as a two-term Governor, is entitled to pension as stipulated by the third schedule, Paragraph D (i) of the Governor and Deputy Governor ((payment of pension) Law, No. 12 of 2010 of Kwara State.
"The said pension has been duly remitted to his account, like other former Governors', since he left office but when via a letter dated 20th August 2015 addressed to the state government, Dr Saraki requested that the payment of pension to his account be stopped and the amount already credited to the account be refunded to the Government, the State Government promptly complied.
"The Government not only stopped the payment of the said pension, the amount already paid into Dr. Saraki's account since he left office was deducted from the money owed to him as well as his other outstanding lawful entitlements.
"In view of the foregoing, it should be noted that neither the Kwara State Government nor Dr. Bukola Saraki violated the state pension law or any other law for that matter. The State Pension Law empowers the State Government to pay pension to former Governors of the State.
"The Kwara State Government will want to reiterate the fact that it was Dr Saraki who on his own volition considered the morality of the situation in which the pension would put him since he is still a serving Senator and chose to abandon his legal rights. We believe he should be commended for decision.
"It is the hope of the Kwara State Government that this clarification will end all the controversy about this issue."
While addressing the controversy, Saraki had said state governments should amend their laws to make it impossible for former office holders to be paid pension entitlement if they get another government appointment.