The error made the red-and-white Indonesian flag resemble Poland's and caused anger in Indonesia, where "shameonyoumalaysia" has become the most popular hashtag on Twitter.
President Joko "Jokowi" Widodo demanded an apology for hurt national pride but also cautioned against exaggerating the incident with his neighbor. The two countries share the same religion and language but often trade accusations of stealing the other's food and culture.
Malaysian Youth and Sports Minister Khairy Jamaluddin met his Indonesian counterpart Imam Nahrawi to personally apologize. After a brief private meeting Sunday, the two ministers shook hands at a news conference.
Indonesia appears to have taken particular offense because the guidebook was distributed to VIPs at Saturday's opening ceremony in Kuala Lumpur for the 29th Southeast Asian Games and only its flag was shown incorrectly.
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Nahrawi, who earlier described the error as "very painful," said he accepted the apology.
"We hope these mistakes don't get repeated because flags are important symbols for each country and should be respected," he said.
Khairy said the mistake was "unintentional and it happened due to our carelessness."
The creation of Malaysia when the British empire was dismantled after World War II was bitterly opposed by Indonesia, itself then a new nation emerging from Dutch colonial rule and a short-lived Japanese occupation.
On Twitter, Indonesians said their flag represents the sacrifices of independence heroes and accused Malaysia of either being stupid or deliberately misprinting it.
"You know, this is maybe the reason why our founding father Soekarno wanted to Kick Your Ass," said one user.