Foreign ministry officials in Prague said that the Czechs had agreed to express regret over "injustices" that took place during the mass expulsion of more than 2.5 million Sudeten Germans after the war.
German officials confirmed that Bonn was prepared to apologise for the injustices suffered by the Czechs under the Nazis and to admit that the Nazi occupation, which began with Hitler's annexation of the largely German-speaking Sudetenland in 1938, laid the foundation for the subsequent expulsions.
"The German side ... is aware of the fact that the National Socialist policy of violence against the Czech people helped to create the basis for the post-war escape, expulsion and forced resettlement [of the Sudeten Germans]," states the declaration, which is set to be initialled next week and formally signed by the Czech Prime Minister Vaclav Klaus and the German Chancellor Helmut Kohl in Prague early next year.
"The Czech side is sorry," the document continues, "that by the post- war expulsion, as well as by the forced resettlement of Sudeten Germans from then Czechoslovakia, by expropriating and revoking citizenship, much suffering and injustice was caused to innocent people."
The mutual apologies come almost 60 years after the infamous Munich Pact that ceded the Sudetenland to Hitler in a bid to satisfy his territorial ambitions, and more than 50 years after the decrees which authorised the expulsion and often violent hounding of Sudeten Germans out of their homes.
The Germans are long used to apologising for actions done in Hitler's name. And, alongside the words, Bonn has pledged some 140m marks for a Czech-German Future Fund, a key aim of which will be to compensate Czech victims of Nazism.
For the Czechs, however, it is a novel experience. Under Communism, the legitimacy of the expulsions - accompanied by mob-style lynchings - was never questioned, and even today many Czechs feel they were totally justified, given what had gone before.
Despite the apology the declaration makes it clear that the validity of the expulsions will not be questioned and there will be no question of compensation for those who were expelled.
"Unlike the Germans we are only just beginning to digest our past," said Adam Cerny, a commentator on the weekly Tydenik. "But while we can now bring ourselves to say sorry for some aspects of the expulsions, we could never accept a reversal of their legal validity."
Representatives of the expelled Sudeten Germans, most of whom settled in Bavaria, have fought to have the decrees declared illegal. They yesterday dismissed the declaration and vowed to continue their fight for "justice" and the right to return to their former homeland. Although most of the expellees are now dead, annual Sudeten German rallies in Nuremberg attract crowds of more than 100,000 and the groups remain an important political force in Bavaria.
Most Czechs and Germans, however, hope the declaration will pave the way to a genuine reconciliation. Looking ahead, the document stresses Bonn's whole-hearted support for the Czech Republic's bid to joinNato and the European Union.