General Jan Griebenauw also told the TRC's amnesty committee the jailbreak involved the operation's most secret man - Civil Co-operation Bureau chief Joe Verster.
Griebenauw and ex-SADF Chief of Staff Intelligence, General Joffel van der Westhuizen, are seeking amnesty for crimes related to the failed Transkei-Ciskei amalgamation plan to form an anti-African National Congress power bloc in the Eastern Cape.
Griebenauw said Sebe was released in order to lead armed resistance movement Iliso Lomzi in an overthrow of his brother, Ciskei president Lennox Sebe.
He said he had been dead set against Operation Katzen from the start as it was "doomed to failure and I could not associate myself with the methods used".
He said police commissioner General Johann van der Merwe; security police chief General Johan Coetzee; and Brigadier Willem Schoon, head of the ANC-Pan Africanist Congress desk at security police headquarters in Pretoria, were kept fully informed about Operation Katzen from its inception in June 1986 until its scrapping six months later.
Griebenauw referred to Verster while explaining his personal role in both the springing of Sebe from Middledrift Prison and the abduction of Kwane Sebe from the Amatola Sun on September 24 and 25, 1986.
He said his regional security police command carried out the initial intelligence-gathering for both operations.
Griebenauw ordered Warrant Officers Hattingh and Fouche, who had since died, to photograph the prison and pinpoint and sketch Charles Sebe's cell. He then spoke to "Joe Verster of Special Forces".
In the mid-1980's Verster was the SADF's most secret man and one of South Africa's most powerful and decorated military leaders.
He was the founder commander of 5 Reconnaissance Regiment and managing director of the murderous CCB from 1985.
Griebenauw had been told on the telephone that Special Forces "would be the operator and that someone from Special Forces would contact me".
"He arrived later and introduced himself and I knew this was the right person. As I said, I had spoken to Joe Verster before."
Griebenauw said that "after the liberation (of Charles Sebe), Joe Verster told me telephonically that the operation had been successful."
"Masked men" from Special Forces had also abducted Ciskei elite unit chief Kwane Sebe and his deputy Bullet Ngwanya, Griebenauw said.
He said his role had been to collect information on border posts and work out safe routes for the snatch team.
Security policemen took up positions on certain roads and "we used codes and flickering lights to safeguard the route to the border post and get the abducted people to safety".
Verster, who received a general's salary as CCB chief, authorised projects before submitting them for approval to the CCB co-ordinator and the chairman - who was also a member of the SADF general staff and head of Special Forces.
Griebenauw said Operation Katzen was never feasible because if Katzen's objective had been met, it would have increased conflict in the region and threatened "the co-operation between the security police and those in Ciskei and Transkei".
"It worried me and didn't sit right with me as a policeman trying to combat terror" that Katzen "was training certain terrorist organisations" like Iliso Lomzi over which there was "no proper control" and which had carried out "acts of terror", he said.
Griebenauw's co-applicant, Van der Westhuizen, testified early on Wednesday that he was unaware of the actual participants in the night raids.
He said SADF Special Forces, then under the command of General Joep Joubert, had carried out these "recommendations and not instructions" made by himself as part of Operation Katzen.
The amnesty hearing continues on Thursday.