The I know at the beginning indicates, that something which was said before is known to the speaker. I can't really tell, what it refers to, because I don't know the context, but let me give you an example:
Have you heard? Amber is getting married!
I KNOW, and from what I heard, her husband-to-be is rich!
Simon has been out of rehab for 5 months.
I KNOW, and he is still sober. That takes a lot of courage.
Both times I KNOW refers to the sentence before.
You can also use I KNOW for a future event or a wish:
I KNOW I would sleep a lot better if they finally caught the thief.