Milan Mandaric said he agreed to pay £4.2 million a year to his "special guy" before their relationship led to "a bitter divorce".
Mandaric told jurors: "In 35 years in football, I never had a closer relationship as a manager than I had with Harry." When asked about their relationship, he said: "Do you mean when I strangled him or when I love him?"
Mandaric said the £189,000 deposits for Redknapp in a Monaco bank account was "something entirely different" from football.
Both Redknapp, 64, of Poole, Dorset, and Mandaric, 73, from Oadby, Leicestershire, deny two counts of cheating the public revenue when Redknapp was manager of Portsmouth Football Club.
Mandaric told Southwark Crown Court: "I want to do something special for Harry because he means more to me than a football manager. This was something as a friend. If this was something to do with employment, I would have done something entirely different."
The payments were "something special for my friend ... That's all I wanted to do." He added: "I want to make it absolutely clear that it was completely away from his duties, his bonuses, his salaries ... It has nothing to do with it. It is an entirely different subject."
Redknapp joined Portsmouth - initially as a director of football - in 2001 before Mandaric asked him to take on managerial responsibilities.
When asked about Portsmouth's promotion to the Premier League, Mandaric said: "It was a dream for me, it was a goal that I desperately wanted to achieve for those wonderful people in the city."
Redknapp and Mandaric did not speak for a year when the manager joined Southampton in 2004, jurors heard. "We didn't speak, it was a little bit of a bitter divorce," Mandaric said. "It was a bit on the bitter side, especially as Southampton-Portsmouth, there's not a lot of love lost."