Manchester bomber Salman Abedi had spoken about killing people "in a public space" for years but it was dismissed as "bravado".
The inquiry in Manchester heard from a prison officer, who was identified by the initials PO1, who described a conversation on December 1 last year with Abedi's close friend Abdalraouf Abdallah, 28, who is serving a jail sentence for terrorism at HMP Wakefield.
During the five-minute chat, PO1 sat on the prisoner's bed in his cell and was told by Abdallah the terror atrocity was done by "one of his boys".
PO1 also said Abdallah informed him that Abedi had talked for years about harming others but everyone thought "he would never go through with it".
Abdallah told the prison officer he was "shocked" and that if he had known Abedi's plans ahead of the Manchester Arena bombing he would have tried to talk him out of it.
Abdallah, giving witness evidence to the inquiry last November, said there was "no way" he would know what Abedi was planning.
Abedi, 22, and his younger brother Hashem, who has been jailed for life, spent months preparing for the attack at the end of an Ariana Grande concert on May 22 2017. Abedi detonated a shrapnel-packed, rucksack bomb surrounded by innocent bystanders, killing 22 people and injuring hundreds more.
PO1 said Abdallah told him: "It was one of his boys who he grew up with and he has always been one of those that said he liked to endanger others. But because he had said it so many times over so many years they just took it as hearsay and would never go through with it."
The prison officer later the same day made an intelligence report on the conversation. It read: "He is feeling really low. That one of his close boys on the out has actually committed the terrorist act in Manchester and states that when he last spoke to him ages ago that he didn't think he would go through with it and that it was just hearsay."
Abdallah was jailed in 2016 for helping four men from Manchester travel to Syria where three of them fought for so-called Islamic State.
Abedi twice visited him in jail, the second time just months before the Arena bombing. They shared an "extremist Islamist mindset", the inquiry has heard, with Abdallah accused of "grooming" Abedi.
Abdallah, a paraplegic who was injured fighting against Gaddafi forces in the 2011 Libya uprising, has denied any involvement or knowledge of the Arena attack.
The hearing continues.
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