The talk show host made the remarks in a fierce Twitter spat with Hannity, which saw the pair spend the last week trading insults.
The row was sparked by Hannity taking offence to Kimmel’s decision to poke fun at the first lady’s Slovenian accent during a segment on Jimmy Kimmel Live!.
Hannity branded Kimmel a “despicable disgrace” and “ass clown” on his Fox News show for teasing the first lady as she read to children at the White House Easter Egg Roll.
The criticism provoked Kimmel to use several minutes of his next programme to hit back at Hannity, saying: "If I'm an ass clown. You are the whole ass circus."
The dispute then moved to Twitter, where Hannity labelled Kimmel "Harvey Weinstein Jr".
Kimmel also made sexually suggestive comments about Hannity's support for US president Donald Trump.
"Don't worry - just keep tweeting - you'll get back on top! (or does Trump prefer you on bottom?)" Kimmel said in a tweet aimed at Hannity.
The Fox host was subsequently accused of being disrespectful to the LGBT+ community - The Daily Beast published an opinion piece titled “Jimmy Kimmel’s homophobic attacks on Sean Hannity expose a liberal blind spot” on Sunday arguing his comments were homophobic.
But Kimmel has now sought to put an end to the spat and apologised in a lengthy statement on Sunday afternoon.
“By lampooning Sean Hannity’s deference to the president, I most certainly did not intend to belittle or upset members of the gay community and to those who took offence, I apologise,” the comedian’s statement said.
Kimmel said he believed that Hannity was offended by his joke about Ms Trump but insisted it was little more than a harmless, innocent gag.
“I will take Sean Hannity at his word that he was genuinely offended by what I believed and still believe to be a harmless and silly aside referencing our first lady’s accent," he said.
"Mrs Trump almost certainly has enough to worry about without being used as a prop to increase TV ratings".
He added: "While I admit I did have fun with our back and forth, after some thought, I realise that the level of vitriol from all sides (mine and me included) does nothing good for anyone and, in fact, is harmful to our country”.
But Kimmel did include a farewell shot for Hannity and quipped he is “hopeful that Sean Hannity will learn from this too and continue his newly-found advocacy for women, immigrants and first ladies and that he will triumph in his heroic battle against sexual harassment and perversion.”
Following Kimmel's apology, Hannity said he would soon release a full response to the comedian.
"Just had this pop up. I am at a tournament with my daughter. I'll have a full and comprehensive response tomorrow on Hannity. 9 EST FOX," he wrote on Twitter.
The initial instance of Kimmel mocking Ms Trump saw him attempt to mimic her accent. “About dis and dat,” he said, laughing.
He then turned to his Mexican American sidekick, who has a heavy accident, and said: “Guillermo, you know what this means? You could be first lady of the United States.”
Responding to the joke, Hannity said: “Liberal Jimmy Kimmel, making fun of the first lady of the United States and her involvement in the White House Easter Egg Roll. Even her accent… Now, I’m going to tell you something: What a disgrace. Hey, Mr Kimmel, that’s her fifth language. How many do you speak?”
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