Julia Gillard has committed five million Australian dollars to support services for affected families and to help biological families reunite.
The Prime Minister apologised for the police after it was recommended a year ago by a senate committee that investigated the impacts of the now-discredited policies.
Unwed mothers were pressured, deceived and threatened into giving up their babies from World War II until the early 1970s so they could be adopted by married couples, which was perceived to be in the children's best interests, the senate committee report found.
Western Australia was the first of five state and territory governments to apologise for forced adoption. Australia has eight such governments.
Roman Catholic hospitals in Australia apologised in 2011 for forcing unmarried mothers to give up babies for adoption and urged state governments to accept financial responsibility.