The academy also apologised for its handling of Smith's “unacceptable and harmful” action, saying they were "unprepared for the unprecedented.”
The motion picture academy has banned Will Smith from attending the Oscars or any other academy event for 10 years following his slap of Chris Rock at the Academy Awards.
The move on Friday comes after a meeting of the academy's Board of Governors to discuss a response to Smith's actions.
In a statement, the academy called Smith's actions “unacceptable and harmful,” while also apologising for its handling of the situation and allowing Smith to stay and accept his best actor award.
“During our telecast, we did not adequately address the situation in the room. For this, we are sorry,” the academy said.
“This was an opportunity for us to set an example for our guests, viewers and our Academy family around the world, and we fell short – unprepared for the unprecedented.”
READ MORE: Academy begins disciplinary action against Smith after slapping incident
Smith pre-emptively resigned from the academy last week during the run-up to the meeting and said he would accept any punishment the academy handed down.
“I accept and respect the Academy’s decision," Smith said in a statement.
“I betrayed the trust of the Academy. I deprived other nominees and winners of their opportunity to celebrate and be celebrated for their extraordinary work,” he added.
Smith's slap, which came moments before he was handed the best actor award for his role in "King Richard", had him facing several penalties ranging from sanctions to expulsion.
The academy has been under intense pressure to respond appropriately to the slap.
READ MORE: 'Out of line' Will Smith apologises to Chris Rock for Oscars slap