Heye graduated from high school in Berlin in early 1914 and immediately joined the Imperial Navy.

While taking his ship to Trondheim in April 1940 to land invasion troops there (Operation Weserübung), he encountered the British destroyer Glowworm and sank it.

Heye sent a message to the British Admiralty through the Red Cross praising the gallantry of Glowworm's commander and crew, and this contributed to LtCdr Gerard Roope receiving the earliest Victoria Cross of World War II, although the award was not made until 1945.

He subsequently advised the German government on issues concerning the establishment and organization of a new military.

Frustrated by what he perceived to be inadequate support from Parliament, Heye resigned his position on 10 November 1964.