The most important part about learning to breathe freely is to practice noticing how it is that you breathe. The more you know about your own habits, the easier it will be to release tensions and achieve free-flow while breathing.
Breathe in so that your torso expands in all directions (downwards into your bowels, forward in your stomach and ribcage, backward in your lower back and ribcage and up into your shoulders [be sure not to raise your shoulders, however]). Remember not to hold anything in place, meaning, let the body do what it does. Allow your breath to touch the very bottom of your torso, breathe as deeply as possible as you can. As you get more into the technique, your back and sides will move with your breathing.
Without contracting your abdominal muscles, move your umbilical inward toward the spine. When you place your finger in front of your mouth, your breath should feel warm and sensuous. It should also be silent. The more noise made while breathing, the more tension there is.
Practice noticing the breath with everything you do, singing (or playing any other instrument), talking, exercising, or doing nothing in particular. Notice what happens to the breath while doing different activities.
Do breathing exercises to increase the amount of control you have with your diaphragm. To help build stamina and strength, breathe in for four seconds, hold for four seconds, then breathe out for four seconds. After you have mastered this, move to 6-6-6, then 8-8-8, all the way to 20-20-20, but do not go past 20.
Try not to think in terms of mastering breath. The best way to approach it, is to be a continual student. The moment you think you have mastered something, you stop learning.
When singing, you should feel like there is a band around your diaphragm (not when you breathe in).
Allow your stomach to sink in naturally when exhaling. Do not keep your stomach tense and tight.