"I wholly retract my statements and apologize to Mr. Dale without reservation for what I said," Ford said in a statement.
"There is absolutely no basis for the statement I made about Daniel Dale taking pictures of children or any insinuations I made," Ford added.
Ford went on to retract other statements, including that Dale had been found "lurking" or "leering" near his property.
Within minutes, Dale indicated via Twitter he is dropping his legal action against Ford.
"I won't be taking legal action against the mayor, and I’m looking forward to getting back to work," said Dale.
Dale added he has not, however, dropped his libel action against Vision TV, the channel on which Ford made his controversial remarks during an interview with Conrad Black.
Ford issued an apology for those remarks earlier this week, which Dale had deemed "clearly unsatisfactory."