"The Philippine government expresses its most sorrowful regret and profound sympathy, and extends its most sincere condolences for the pain and suffering of the victims and their families," Hong Kong's leader, Chief Executive Leung Chun-ying, told reporters.
The statement avoided the word "apology," which had been a longstanding demand of the survivors and families of the victims.
The Philippine police chief has also written to the families.
The two sides had previously agreed on three other demands -- compensation, holding responsible officials accountable and putting in place safety measures for tourists.
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Relations became increasingly strained as they failed to resolve the deadlock over the apology, with Hong Kong announcing a first phase of sanctions in January in which it cancelled visa-free access for holders of Philippine government passports.
The agreement comes after months of talks between Hong Kong and Philippine officials, including a visit this week by a delegation including Manila Mayor Joseph Estrada, a top aide of President Benigno Aquino III and the national police chief.
Following today's announcement, Leung said the Hong Kong government has lifted the travel sanctions against the officials as well as a travel warning for the Philippines.