British Prime Minister Gordon Brown has apologised fully and unconditionally for a policy under which thousands of British children were sent to former colonies.
The Child Migrants Programme, which ended 40 years ago, was meant to offer a better life abroad for poor children but many ended up abused and exploited.
Mr Brown says it was a shameful episode.
He also announced a fund of more than $NZ12 million to help reunite families that were torn apart.
Many were wrongly told their parents were dead, while parents were given very little information about where their children were going.
In total, 130,000 children aged between three and 14 were sent to Canada, New Zealand, South Africa, Zimbabwe (formerly Rhodesia) and Australia. The BBC reports the last children sailed in 1967.
Former child migrants were consulted
The International Association of Former Child Migrants and their Families said it was a "momentous day". Secretary Harold Haig said migrants had waited a lifetime for it.
He said the former child migrants themselves were consulted about the form the apology took.
Sixty were flown to London so they could listen to the statement in person. Some 7000 child migrants from Britain still live in Australia.