Smith, who has been replaced as captain by Tim Paine and will not be considered for a leadership position for two years, was banned from international and domestic action for 12 months following a Cricket Australia (CA) investigation into the incident at Newlands.
The 28-year-old was deemed to have knowledge of a plan to alter the condition of the ball, which CA alleges David Warner developed and provided instructions for Cameron Bancroft to carry out with sandpaper, and of failing to try to stop its implementation. Warner, vice-captain at the time, was also handed a one-year ban and Bancroft received nine months, but all three are entitled to an appeal.
A tearful Smith apologised for not stopping the scheme going ahead and shouldered the blame.
Addressing the media in Sydney, he said: "To fans of cricket all over the world and to all Australians who are disappointed and angry, I'm sorry. What happened in Cape Town has already been laid out by Cricket Australia.
"I want to make clear that as captain I take full responsibility. I made a serious error of judgement and I now understand the consequences. It was a failure of leadership, of my leadership. I'll do everything I can to make up for my mistake and the damage it's caused.
"If any good can come of this, if it can be a lesson to others, then I hope I can be a cause for change. I know I'll regret this for the rest of my life, I'm absolutely gutted.
"I hope in time I can earn back respect and forgiveness. I've been so privileged and honoured to represent my country and captain the Australian cricket team. Cricket is the greatest game in the world, it's been my life and I hope it can be again. I'm sorry and I'm absolutely devastated.
"Good people make mistakes and I've made a big mistake by allowing this to happen. It was a huge error of judgement and I'm deeply sorry.
"I don't blame anyone. I'm the captain, it's on my watch and I take responsibility for the actions of what happened last Saturday in Cape Town."
Tough to watch Cameron & Steve go through the 2 statements they just made. They will learn from this & be better in the future I’m sure!
— Mitchell Johnson (@MitchJohnson398) March 29, 2018
Asked whether he was aware of similar antics in other matches during his captaincy, Smith said: "To my knowledge this has never happened before. This is the first time I've seen this happen and I can assure you it'll never be happening again."
Smith outlined the impact the scandal has had on his family, his voice breaking as he struggled to talk about his parents.
"[To the children] I say three things. Firstly, that I'm deeply sorry. I love the game of cricket, I love entertaining young kids, I love kids wanting to play the great game of cricket that I love," he said.
"The two other things are, any time you think about making a questionable decision, think about who you're affecting. You're affecting your parents and to think about the way my old man's been and my mum, it hurts."
Photo Getty Images. Caption: Steve Smith tearful as he addresses the media