B Ramalinga Raju said the deception had started out as an attempt to cover a small accounting discrepancy but had grown to "unmanageable proportions", the Times reports.
The fraud had apparently gone undetected by India's market regulators or the firm's auditor PricewaterhouseCoopers for years, the newspaper added.
"It was like riding a tiger, not knowing when to get off without being eaten," Mr Raju said.
The episode will raise fresh concerns about the state of corporate governance in India. IT had long been considered one of the best regulated industries in the country. Indeed, last year Satyam had received an award from the World Council for Corporate Governance, the Times noted.
India's corporate affairs minister Prem Chand told Reuters that the government will take "all necessary action" to fight corporate corruption.
Shares in Satyam, whose clients have included General Electric and the United States government, fell by 80 per cent after the fraud was revealed.