New South Wales Premier Barry O'Farrell has delivered an apology over the policy of previous governments to remove children from unwed mothers.
Mr O'Farrell told a packed gallery that Parliament acknowledged the traumatic effects of the policy of forced adoptions that was pursued right up to the 1970s.
In a speech that was interrupted twice by a spectator, he said it was important to admit wrongs were done, the ABC reports.
"It caused years of pain and grief for many, instead of the joy and delight of parenthood might reasonably be expected to bring," he said.
"Today in this, Australia's first parliament, we acknowledge the terrible wrongs that were done and with profound sadness and remorse say to those living with ongoing grief and pain, we are sorry."
Parents and children who were forcibly separated in hospitals and unwed mothers homes in the 1950s, 60s and 70s were present at the joint sitting of Parliament to hear the apology.