The fund, which translates to about N2.4billion at the official rate, was recovered from Mr Ibori and his associates.
The United Kingdom government is set to return to Nigerian government, over £4.2 million recovered from a former Governor of Delta State, James Ibori, who was convicted of corruption charges in the U.K. in 2012.
The money translates to about N2.4 billion at the official exchange rate.
Representatives of both the U.K. and Nigerian governments signed an agreement for the return of the money to Nigeria in Abuja on Tuesday.
The signing of the agreement, which took place at the Federal Ministry of Justice, Abuja, was done under the auspices of the U.K.-Nigeria Memorandum of Understanding (MoU), which came into force in 2016.
The British High Commissioner, Catriona Laing, signed the agreement on behalf of the U.K. government while the Attorney-General of the Federation, Abubakar Malami, signed it on behalf of the Nigeria government.
The about £4.2 million was recovered from Ibori, his associates and relatives.
Mr Ibori pleaded guilty to money laundering, conspiracy to defraud, and forgery in a U.K. court in February 2012.
He was sentenced to a total of 13 years in prison.
Some of his associates and family also received sentences for similar offences and were similarly sent to prison.
Mr Ibori, a man who stole millions from the suffering people of oil-rich Delta State and laundered the proceeds in the U.K., had earlier been set free of the charges by a Nigerian federal court.
He was later arrested in the United Arab Emirate (UAE) and extradited to the U.K where he was eventually jailed for the aspects of the crimes committed in the U.K.
The ex-convict, who was believed to retain his political influence in Delta State while serving his jail term in the U.K., returned to Nigeria in February 2017 after completing his imprisonment.
'U.K won't welcome stolen assets'
Speaking at the event Ms Laing said the signing of the agreement was a demonstration of the U.K. government's commitment to recovering and returning corruptly-obtained assets to the rightful owners.
She noted that the recovered fund was a product of a long-drawn battle with third parties who had shown interest in it but were eventually defeated in U.K courts.
She said, "This agreement represents the culmination of many years of work by law enforcement authorities in the UK and Nigeria. The return of the assets to Nigeria has been subject to a number of hard-fought legal challenges by third parties which were defeated in the UK courts.
"It is vitally important that this agreement maxes strong provision for transparency, monitoring and accountability. It is a guiding principle of both the U.K. and Nigerian governments that stolen assets should be used for projects that benefit Nigeria's poor.
"I believe that this agreement demonstrates the UK's commitment to recovering and returning corruptly-obtained assets."
She said the agreement was another example of the success of the close collaboration between the U.K. and Nigeria.
She also warned intending looters that stolen assets were not welcome in the U.K., adding that whoever hide proceeds of crime in her country would be visited with the full weight of the law.
"Money obtained through criminality or corruption is not welcome in the UK. We will ensure the full weight of law enforcement to crack down upon those who look to use, move or hide their proceeds of crime in the U.K," she said.
'Funds to be ploughed into three projects'
On his part, the AGF said the money would assist the Nigerian government in expediting the construction of the Lagos-Ibadan Expressway, Abuja-Kano Road and the Second Niger Bridge, which he said would boost economic growth and help alleviate poverty.
He said, "The government of Nigeria is committed to ensuring the transparent management of recovered assets. The asset returned from the UK will support and assist in expediting the construction of three major infrastructure projects across Nigeria: The Lagos -- Ibadan Expressway, Abuja-Kano Road and the Second Niger Bridge.
"These projects are being executed under the supervision of the Nigeria Sovereign Investment Authority.
"The projects will boost economic growth and help alleviate poverty by connecting people and supply chains from the East to the West and to the Northern part of Nigeria, a vast area covering several kilometers with millions of the country's population set to benefit from the road infrastructures."
He also appealed to the U.K. for greater cooperation in the early repatriation of stolen assets.
Mr Malami also noted that the participation of civil society organisations in the monitoring of the use of the returned of the assets was a great innovation and was fully supported by the government of Nigeria.
He urged other African countries to emulate Nigeria's great strides in the application of returned assets to development projects in line with the United Nations Sustainable Goal 16.
The projects for which the money has been earmarked are being executed by the Nigeria Sovereign Investment Authority.
The Nigerian government has also established a Monitoring Team to oversee the implementation of the projects and to report regularly on progress.
It engaged Cleen Foundation, a civil society organisation to provide additional monitoring and oversight.