The New National Party - the successor to the National Party that led apartheid - approved its dissolution at a meeting of its federal executive in Johannesburg on Saturday.
This followed a decision, taken last April after a humiliating defeat in national elections, to join forces with the ruling African National Congress.
"What we do today is part of our contribution to finally ending the division of the South African soul," NNP leader Marthinus van Schalkwyk said.
"It cannot be denied that the forerunner of the NNP, the NP, brought development to a section of South Africa, but it also brought suffering through a system grounded in injustice."
The National Party, which came to power in 1948, presided over 48 years of systematic and often brutal oppression of the country's black majority, who were denied the right to vote or mix with whites.
Mandela became South Africa's
first black president in 1994
After prolonged international sanctions and rising domestic pressure, National Party leader FW de Klerk released African National Congress leader Nelson Mandela in 1990 and launched reforms that led to the first multiracial elections in 1994.
Mandela became the country's first black president.
The party subsequently changed its name to the New National Party but failed to carve out a new identity for itself in post-apartheid South Africa and rapidly lost support.
The NNP won less than 2% of the vote during last April's elections that clinched a second term for President Thabo Mbeki, prompting Van Schalkwyk to pledge his allegiance to the ANC.