At a ceremony in the Australian capital of Canberra attended by tearful former child migrants, Rudd apologized for his country's role in the migration and extended condolences to the 7,000 survivors of the program who still live in Australia.
"We are sorry," Rudd said. "Sorry that as children you were taken from your families and placed in institutions where so often you were abused. Sorry for the physical suffering, the emotional starvation and the cold absence of love, of tenderness, of care. Sorry for the tragedy - the absolute tragedy - of childhoods lost."
The apology comes one day after the British government said Prime Minister Gordon Brown would apologize for child migrant programs that sent as many as 150,000 poor British children as young as 3 to Australia, Canada and other former colonies over three and a half centuries.
The programs, which ended 40 years ago, were intended to provide the children with a new start - and the Empire with a supply of sturdy white workers. But many children ended up in institutions where they were physically and sexually abused, or were sent to work as farm laborers.
Rudd also apologized to the "forgotten Australians" - children who suffered in state care during the last century. According to a 2004 Australian Senate report, more than 500,000 children were placed in foster homes, orphanages and other institutions during the 20th century. Many were emotionally, physically and sexually abused in state care.
Some in the audience wept openly and held each other as Rudd shared painful stories of children he'd spoken with - children who were beaten with belt buckles and bamboo, who grew up in places they called "utterly loveless."
"Let us resolve this day that this national apology becomes a turning point in our nation's story," Rudd said. "A turning point for shattered lives, a turning point for governments at all levels and of every political hue and color to do all in our power to never allow this to happen again."
At that, the audience erupted into loud cheers and applause.
"I've been waiting years for this," said Dorothy Chernikov, a child migrant from Britain who arrived in Australia at the age of 11.
Chernikov said she has found 41 previously unknown relatives in the past two decades.
"I have an identity now. For 52 years I had no identity. I felt I was nobody. The weight is off my shoulders," she said. "I mean, my family loves me so much. I speak to them every week, on my computer every day. It's absolutely terrific."
The British government has estimated that a total of 150,000 British children may have been shipped abroad between 1618 - when a group was sent to the Virginia Colony - and 1967, most of them from the late 19th century onwards.
After 1920, most of the children went to Australia through programs run by the government, religious groups and children's charities.
A 2001 Australian report said that between 6,000 and 30,000 children from Britain and Malta, often taken from unmarried mothers or impoverished families, were sent alone to Australia as migrants during the 20th century. Many of the children were told that they were orphans, though most had either been abandoned or taken from their families by the state. Siblings were commonly split up once they arrived in Australia.
Authorities believed they were acting in the children's best interests, but the migration also was intended to stop them from being a burden on the British state while supplying the receiving countries with potential workers. A 1998 British parliamentary inquiry noted that "a further motive was racist: the importation of 'good white stock' was seen as a desirable policy objective in the developing British Colonies."
British Children's Secretary Ed Balls said the child migrant policy was "a stain on our society."
"The apology is symbolically very important," he told Sky News television.
"I think it is important that we say to the children who are now adults and older people and to their offspring that this is something that we look back on in shame," he said.
"It would never happen today. But I think it is right that as a society, when we look back and see things which we now know were morally wrong, that we are willing to say we're sorry."
Britain has been trying to make amends since the late 1990s by funding trips to reunite migrants with their families in Britain.
Brown's office said officials would consult with representatives of the surviving children before making a formal apology next year. Official apologies for historical wrongs have proved controversial.
Former Australian Prime Minister John Howard initially resisted calls to apologize to institutionalized children and Australian Aborigines, arguing that contemporary Australians should not take responsibility for mistakes made by past generations.
Rudd reversed the policy after he was elected in 2007 and apologized to Aborigines for 200 years of injustice since European settlement.
Associated Press writer Jill Lawless reported from London.