Former Sun editor Kelvin MacKenzie who wrote the headline The Truth has offered his “profuse apologies to the people of Liverpool for that headline”.
In a statement issued today, he said he was "totally misled".
The Sun's front-page four days after the tragedy included claims Liverpool fans had urinated on police officers resuscitating the dying and stolen from the dead and caused widespread revulsion in the city and led to an almost-total boycott of the paper on Merseyside that exists to this day.
But the apology was rejected by Trevor Hicks, of the Hillsborough Families Support Group, who said it was "too little, too late" and calling him "lowlife, clever lowlife, but lowlife".
In his statement today, Mr MacKenzie said: "Twenty-three years ago I was handed a piece of copy from a reputable news agency in Sheffield in which a senior police officer and a senior local MP were making serious allegations against fans in the stadium.
"I had absolutely no reason to believe that these authority figures would lie and deceive over such a disaster.
"As the Prime Minister has made clear these allegations were wholly untrue and were part of a concerted plot by police officers to discredit the supporters thereby shifting the blame for the tragedy from themselves.
"It has taken more than two decades, 400,00 documents and a two-year inquiry to discover to my horror that it would have far more accurate had I written the headline The Lies rather than The Truth.
"I published in good faith and I am sorry that it was so wrong."
It is in stark contrast to his previous comments about the tragedy.
Speaking five years ago he said he was not sorry for the way his paper covered events at Hillsborough.
Appearing on BBC1's Question Time, he said he only apologised at the time because he was told to by his paper's proprietor, Rupert Murdoch.
That followed comments reportedly made at a private dinner where he was alleged to have said: "I'm not sorry then and I'm not sorry now."
The Sun printed a full-page apology in 2004 describing its coverage of the disaster as "the most terrible mistake in its history".
The reporter who wrote The Sun story said he was "aghast" at the headline.
Speaking to a BBC documentary, Hillsborough: searching for the truth, Harry Arnold said he had written a "fair and balanced" story based on "allegations".
He said he saw Mr MacKenzie, the paper's then editor, writing the infamous headline.
Mr Arnold said: "When I saw the headline, 'The Truth', I was aghast because that wasn't what I'd written. I'd never used the words the truth."
He said Mr MacKenzie told him not to worry and said he would "make it clear that this is what some people are saying".
The way the Hillsborough disaster was reported in the press has been a source of anger for more than 20 years.
Today's report by the Hillsborough Independent Panel traced the origin of the stories, which were also carried in other newspapers, to a Sheffield-based news agency which had been briefed by officers from South Yorkshire Police (SYP), a local Police Federation spokesman and local MP Irvine Patnick.
It states the federation "supported informally by the SYP Chief Constable, sought to develop and publicise a version of events that focused on several police officers' allegations of drunkenness, ticketlessness and violence among a large number of Liverpool fans".
The panel said the spread of misinformation began when match commander, Chief Superintendent David Duckenfield, told "a falsehood" that fans had broken into the ground causing the deadly crush.
That was followed by "further serious allegations... from unnamed sources" that "drunk and aggressive" fans forced entry.
The report identifies those sources as Mr Patnick and a federation spokesman.
Their allegations were reported by White's News Agency and were based on meetings with police officers and interviews with Mr Patnick and Paul Middup, the secretary of the South Yorkshire Police Federation.
The report states "Mr Patnick based his comments on a conversation with police officers on the evening of the disaster while the officers were in considerable distress."
White's later said the allegations were based on conversations with "four separate police sources" which was considered "sufficient verification for the story to be considered factually accurate".
The agency later received copies of officers' sworn statements alleging "drunken and violent behaviour" by fans.
The panel also saw a record of a meeting of federation members where Mr Middup said Chief Constable Peter Wright had told him "the truth could not come from him" but he had given the federation a "free hand".
Former Sun editor David Yelland criticised his former employer.
He tweeted: "People in authority, who had power, including my old paper, treated Liverpool fans as second-class citizens. That was and is the scandal."
White's, the Sheffield news agency, said in a statement: "Several reporters from this agency had some involvement in covering the Hillsborough tragedy and the aftermath.
"In common with many other journalists, reporters from this agency spoke to the then Sheffield Hallam MP Irvine Patnick. A senior reporter, who has since died, and with long-standing police connections, also spoke to senior officers.
"As result, as a responsible and reputable agency, we did report the allegations to all the national newspapers and media outlets.
"The agency had no control over how the allegations were presented and were shocked by the way the story was presented by the Sun. Other newspapers reported the allegations in a different way.
"We welcome the publication of all documents relating to the Hillsborough tragedy and hope it brings some measure of closure for those affected. We have no further comment to make."
Sir Irvine, a Conservative who was knighted in 1994, said nothing as he left his home in the south-west of Sheffield this afternoon.
He walked out of the stone-built detached property and refused to answer questions from waiting reporters.