US website RadarOnline claims to have an audio recording of actor Tim Sizemore saying he had set Hurley up with the former American president when he asked for her phone number at a White House gathering.
The affair started in 1998 when Mr Clinton was still president, according to the report.
But the actress and model has taken to Twitter to rubbish the claim, saying she will take legal action.
"Ludicrously silly stories about me & Bill Clinton. Totally untrue. In the hands of my lawyers. Yawn," she tweeted.
Saving Private Ryan actor Sizemore, who is Hurley's ex-boyfriend, was apparently telling friends of the alleged affair in the tape recording.
Mr Clinton has not responded to the reports.
While in the White House, Mr Clinton famously had an affair with intern Monica Lewinsky, which almost brought down his presidency and made her a household name.
Mr Clinton and his wife, former US secretary of state Hillary Clinton, have weathered various reports of his infidelity during their nearly 40-year marriage.
Hurley was previously married to Indian businessman Arun Nayar and recently had a relationship with cricketer Shane Warne.
Her former partner Hugh Grant was caught with Hollywood prostitute Divine Brown in 1995.
(c) Sky News 2014
Original headline: Liz Hurley Reacts To Bill Clinton Affair Reports
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