Follow after the break to read more and see more pictures of the house and the toilet where the shooting took place. Some of the pictures are not nice.
The wife, who gave her name only as Hauwa and said she was 31, cried into her hands as she spoke to Reuters.
Chris McManus and Italian Franco Lamolinara were kidnapped last May while working for a construction company in northwest Nigeria. They were killed on March 8 by their captors after gunfire erupted during an abortive rescue attempt.
Hauwa said bullets flew into the room where she and her husband were staying, killing her husband.
"After that, there were about six men who came out of the house with the two hostages," she said. "They came into our wing of the compound, pushed the captives into the toilet and just shot them. I screamed."
She denied knowing the hostages had been living in the same compound as her. She said they were kept in the main house which she was strictly forbidden to enter.
Nigerian authorities have detained five Islamist militants suspected of involvement in the kidnapping. Two of the men were arrested before the rescue attempt and three at the compound where the raid took place.
"I don't know why they didn't arrest me, I really didn't know anything about the hostages. No guard was allowed in the main house. The forces saw me crying next to my husband's body, which they took away," she said.
She said she had lived in the house for four months after her husband got a job there as a guard. But she said she never suspected anything was wrong.
The people using the main house arrived at night and usually left very early in the morning, she said.
GRISLY CRIME SCENE
The crime scene was largely unguarded on Saturday with bystanders wandering in and out. Bullet holes and blood spattered the cream-coloured walls.
The floor of the toilet where Hauwa said the hostages had been shot was coated in semi-dried blood. The sink had been ripped off and lay next to a plastic waste paper basket and a bottle of bleach.
Two copies of the Koran lay in one bullet-marked room.
A senior source at the State Security Services (SSS) told Reuters on Saturday the five suspects detained had been transferred to a facility in the capital Abuja for questioning.
They included the ringleader of the kidnappers, a man going by the name of Abu Mohammed, the source told Reuters.
Authorities suspect a splinter group of Boko Haram, the radical Islamist organisation with links to al Qaeda's north African wing, was behind the kidnapping.
A purported spokesman for Boko Haram's main faction, based in the northeast, on Friday denied any part in the kidnapping.
Nigerian forces arrested two of the conspirators on Tuesday, including Abu Mohammed, near Sokoto. After interrogation, the two men led them to the compound.
Nigerian and British forces mounted a joint raid two days later. The source said three kidnappers were taken alive from inside the house and that the others were killed.
A diplomatic row broke out between London and Rome on Friday over Britain's failure to inform the Italian government before launching the botched hostage rescue mission.