The Canadian Government has followed churches and apologised for forcing 150,000 aboriginal children to attend state-funded Christian boarding schools aimed at assimilating them.
Prime Minister Stephen Harper made the apology in parliament in Ottawa, in front of hundreds of ex-schoolchildren.
The schools operated from the late 19th Century until the 1990s, although most of them shut in the 1970s.
Accounts of physical and sexual abuse at the institutions have also emerged.
Australia apologised for a similar policy in February when the Australian Prime Minister Kevin Rudd made a similar gesture to the so-called Stolen Generations - thousands of the continent's Aborigines who were forcibly taken from their families as children under assimilation policies.
Canada has gone a step farther, offering those who were taken from their families compensation.
Most of the churches that ran the schools apologised in the 1980s and 1990s and have since urged the Canadian government to follow suit.
Nothing less than a full national apology by the Canadian government to Canada's Aboriginal peoples was acceptable, the United Church of Canada had said.
The United Church has itself tried to address the range of harms perpetrated against Aboriginal children in the schools through abuse settlements, healing initiatives, full disclosure and acknowledgement of the history, and efforts toward reconciliation and right relations.
The United Church of Canada apologized to First Nations peoples in August 1986 and then in 1998 offered a formal apology to former students of residential schools, their families, and communities.
Mr Harper said aboriginal Canadians had been waiting "a very long time" for an apology from the Government too.
"I stand before you today to offer an apology to former students of Indian residential schools. The treatment of children in Indian residential schools is a sad chapter in our history."
He said the system had been based on the assumption that "aboriginal cultures and spiritual beliefs were inferior and unequal".
He went on: "We now recognise that, far too often, these institutions gave rise to abuse or neglect and were inadequately controlled, and we apologise for failing to protect you.
"The government of Canada sincerely apologises and asks the forgiveness of the aboriginal peoples of this country for failing them so profoundly. We are sorry."
The apology was welcomed by Assembly of First Nations head Phil Fontaine, present with other aboriginal leaders in the chamber as Mr Harper spoke.
"We heard the government of Canada take full responsibility for this dreadful chapter in our shared history," Mr Fontaine said.
"Finally, we heard Canada say it is sorry," said Mr Fontaine, one of the first former schoolchildren to go public with his experiences of physical and sexual abuse at residential school.
Many schoolchildren recall being beaten for speaking their languages, and losing touch with their parents and culture.
The legacy of the system has been cited by aboriginals as the root cause of epidemic rates of alcoholism and drug addiction among their people.
The apology is part of a C$2bn ($1.9bn; £990m) deal between the government, churches and the surviving former schoolchildren.
Under the agreement, they have begun receiving financial compensation for their suffering.
A truth and reconciliation commission has also been set up, which will be granted access to government and church records.