The Crown will formally apologise for its actions in the land wars, imprisoning members of Parihaka and invading the settlement. It will also offer a "legacy statement" setting out the historical issues faced by the community, its founding principles and future hopes.
Parihaka Papakainga Trust Chair Puna Wano-Bryant said the original establishment of Parihaka in 1865 was known as Te Tau o te Haeata (The year of a new dawn) and the reconciliation package with the Crown was another new beginning.
It would allow Parihaka to "fulfil the legacy without the struggle" - providing the community with a secure future.
Parihaka was a refuge for Maori from surrounding areas being forced off their land by confiscations and the Land Wars in the region in the 1860s.
Te Whiti set up the community after his own village was invaded in 1865 and he fled inland.
He and Tohu led their followers in a non-violent campaign against land alienations, including ploughing land taken from Maori and putting up barricades on roads built by the Crown.
Attorney General Chris Finlayson said it was the first time such a form of reconciliation had been used and it was highly unlikely to happen again because of the unique nature of Parihaka.
"Since 1881 when the invasion took place, there has been intense ill-feeling up there about what happened. There have been numerous attempts by the Crown to apologise, but somehow they've come to nothing." He said the time for that to happen was now right.
The reconciliation package was agreed to earlier this year by the Parihaka Papakainga Trust after consulting with the community.
It was the result of a Kawe Tutaki report (A Vehicle Towards Closure) by a panel led by Dame Tariana Turia.
Turia said yesterday that it was a significant day for New Zealand. "I'm glad this has come. The really tragic thing when people are trying to work through these settlements is they often cause division. And the longer you take, the more division you get.
The history is tragic, but they are resilient people. And it is very, very unique."
She said Parihaka wanted to establish an education centre there so people from around the world could go to learn about the actions the Parihaka people took.
The Government is also considering a "Parihaka Day", possibly on November 5, that being the day in 1881 when Crown troops invaded the peaceful community and arrested Te Whiti and Kakahi before returning the next day to destroy the village.
The apology is expected to acknowledge the violence of the invasion and its aftermath, including the rape of women by Crown forces.
Te Whiti and Tohu were kept in prison in Christchurch without trial until 1883, when they were released and returned to Parihaka.
The package also includes an agreement to govern Parihaka's relationship with Government agencies and local councils in the area, including support for Parihaka's development and healing.
In a statement when the package was agreed to, the Parihaka Trust said a small section of the community were opposed to any reconciliation, but the majority believed it was essential to the future of the community. They had argued for more than $9 million, but did not want the issue of the funding to overshadow the meaning of the apology and a "legacy statement" setting out the historical issues.
The Government will put up legislation to bring the reconciliation package into effect.