She said that the tweets were "insensitive to South Africans".
Ms Zille will step down from all party leadership positions but remain the premier of Western Cape province.
Party leader Mmusi Maimane said the deal will help DA focus on the 2019 election.
He said the party chose to avoid a protracted legal battle and instead seek reconciliation.
Ms Zille had tweeted in March that colonialism was not only negative:
Her tweets caused public outrage forcing her to apologise at least three times with the DA bowing to political pressure to suspend her last week.
But today at a press conference with Mr Maimane she said she apologised "unreservedly".
Ms Zille read a prepared statement saying her comments were "indefensible" and "insensitive to South Africans who suffered from colonial oppression".
She also said she had "undermined" Mr Maimane saying that he is the leader of the party and "we must all get behind his leadership".
BBC's Southern Africa correspondent Karen Allen reports that Ms Zille, who was a key figure in the anti-apartheid movement, has been accused by critics of damaging his leadership.
Mr Maimane said he found his colleague's tweets offensive but added that she should continue with her government job - running the Western Cape Province.