His speech focused in particular on the suffering of what have become known as the "Stolen Generations" - mostly mixed-race children, who were taken from their families up until the 1970s in a bid to assimilate them into white society.
But Rudd's address also took in a broader apology over what he called "a great wrong" committed against Australia's indigenous peoples, repeatedly using the crucial word "sorry".
"As prime minister of Australia, I am sorry. On behalf of the government of Australia, I am sorry. On behalf of the parliament of Australia, I am sorry," Rudd said.
Wednesday's apology is being viewed as a watershed in Australia, with television networks airing the speech live and crowds gathering around giant screens in major cities to witness the event.
In the remote community of Mutitjulu, close to Uluru or Ayers Rock in the centre of Australia, the apology was welcomed by Aboriginal leaders.
"Personally I think sorry’s a very important word to say," Dorethea Randall, chairwoman of Mutitjulu council told Al Jazeera.
"It recognises the wrong that's been done in the past and it's a process of starting healing for all indigenous people."
In the Australian capital, Canberra, hundreds of Aborigines from across Australia gathered in front of parliament to hear the speech, many having travelled thousands of kilometres to be there.
Many also packed the public galleries inside the parliament building.
"This is the most significant moment for our people that's happened in my lifetime," Aboriginal man Darryl Towney told AFP.
"For us, this is like the Berlin Wall coming down."
Aboriginal population of Australia estimated between 750,000 to two million prior to arrival of first white settlers in 1788.
Combination of disease, loss of land and violence reduced numbers by 80 per cent over the following century. Smallpox wiped out more than half the population.
Between 1900 and early 1970s estimated 100,000 Aborigines were taken from their natural parents as part of an assimilation programme, now dubbed the Stolen Generation.
Aborigines not granted vote in federal elections until 1962.
Aboriginal population was not counted in national census until 1967, prior to which Aboriginal affairs were governed under Australian flora and fauna laws.
According to 2006 census, Aboriginal and Torres Strait Islanders population stood at 455,031, out of total Australian population of 20,061,646.
Many aboriginal communities are plagued by high unemployment, juvenile delinquency, school dropouts, drugs, crime, domestic and sexual problems, and alcoholism.
Government statistics show an indigenous Australian is 11 times more likely to be in prison than a non-indigenous Australian, while indigenous Australians are twice as likely to be a victim of violence.
A 2007 study found standards of healthcare for Aborigines 100 years behind rest of Australia, with Aboriginal men having life expectancy 18 years below national average.
Aborigines remain Australia's most disadvantaged minority, with a lifespan 17 years shorter than the national average, and disproportionately high rates of imprisonment, heart disease and infant mortality.
In Sydney, thousands of people cheered and applauded the speech shown on a big screen in the city's central Martin Place.
Large crowds also gathered in the rain in the city's largely Aboriginal district of Redfern to watch the address on specially erected screens.
While the apology and Rudd's pledges to improve Aboriginal welfare have been broadly welcomed, he has also received criticism from some community leaders for ruling out direct financial compensation.
Speaking to parliament Rudd said the apology was offered as part of "the healing of the nation", adding that it would allow a "new page" to be written in the history of Australia.
A failure to address the injustices done to Australia's indigenous people was "a great stain" on the nation's soul, Rudd told parliament.
"We today take this first step by acknowledging the past and laying claim to a future that embraces all Australians," he said.
Rudd's apology went much further than the highly qualified statement initially expected, drawing emotional applause from the crowd outside parliament.
Focusing on one of the most painful episodes, he told parliament up to 50,000 children were taken from their families, noting there was "something terribly primal" in the many first-hand stories of the Stolen Generations.
"The pain is searing, it screams from the pages, the hurt, the humiliation, the degradation and the sheer brutality of the act of physically separating a mother from her children is a deep assault on our senses," he said.
|The apology was broadcast on giant screens in |
cities across Australia [GALLO/GETTY]
But Rudd's speech also referred to the "past mistreatment" of all Aborigines, adding "the injustices of the past must never, never happen again".
"For the pain, suffering and hurt of these stolen generations, their descendants and for their families left behind, we say sorry," he said.
"To the mothers and the fathers, the brothers and the sisters, for the breaking up of families and communities, we say sorry.
"And for the indignity and degradation thus inflicted on a proud people and a proud culture, we say sorry."
Use of the word "sorry" carries major symbolism for Aborigines after Rudd's conservative predecessor, John Howard, refused to utter it when he was in power.
Howard was the only one of Australia's five surviving prime ministers who was not in parliament on Wednesday to hear Rudd's speech, although his Liberal party, now in opposition, backed the motion of apology.
Howard lost his parliamentary seat in last November's national elections which saw a landslide victory for Rudd's Labor party.