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Maher Arar smiles as he discusses the government's apology and compensation package at a news conference in Ottawa on Friday. ((Tom Hanson/Canadian Press))

Maher Arar said his innocence has been confirmed by the formal apology Prime Minister Stephen Harper issued to him on Friday.

"This means the world to me,"Arar saidduringa one-hour press conference in Ottawa on Friday afternoon.

Earlier Friday, Harper apologized and offered a $10.5 million compensation packageto Arar and his family, along with money for legal fees, for the "terrible ordeal"they suffered after Arar spent nearly a year in a Syrian jail.

"On behalf of the government of Canada, I wish to apologize to you…and your family for any role Canadian officials may have played in the terrible ordeal that all of you experienced in 2002 and 2003," Harper said.

"I sincerely hope that these words and actions will assist you and your family in your efforts to begin a new and hopeful chapter in your lives," he said.

Arar said the apology and package will allow him to finally put hisdifficulties aside.

"The struggle to clear my name has been long and hard," he said, with his lawyers at his side. "I feel now I can put more time into being a good father [to my children], and to being a good husband and to rebuilding my life."

He said he is thankful for the Canadians who supported him and helped him get home.

He said he's also gratefulto the previous federal Liberalgovernment, which called an inquiry into his case, and the current Conservative government, which is implementing the recommendations of the inquiry.

Arar said he would like to use the compensation money to contribute to Canadian society, although he hasn't worked out specific plans yet. He wants to help ensure that others do not end up in the same situation that he did.

"This struggle has taught me how important it is to stand up for human rights," he said. "I feel proud as a Canadian and I feel proud of what we've been able to achieve."

Still, Arar said his life has not gone back to normal. He'sstillon a security watch list in the United States and he's afraid to travel anywhere outside of Canada.

He also said he is stigmatized as a terrorist, and he can't shake that label. He often Googles his own name and sees it tied with the words "suspected terrorist."

"There's no amount of money that would compensate me on what my family and I have gone through," Arar said. "I wish there was a way I could buy my life back."

Harper, who made the announcement in the foyer of the House of Commons in Ottawa, said the settlement negotiated with Arar includes $10.5 million for pain and suffering, along with an estimated $1 million in legal fees.

Arar, a Canadian citizen born in Syria, hadbeen seeking$37 million in compensation and an official government apology.

Initially, Arar hadwanted to sue the government for$400 million but later lowered the amount. Harper said the $10.5 million is roughly what Arar would have received through a lawsuit.

Harper also said that Canada has sent letters to theU.S. and Syrian governments to object toArar's treatment.

"We cannot go back and fix the injustice that occurred to Mr. Arar. However, we can make changes to lessen the likelihood that something like this will ever happen again," he said.

Arar now lives in Kamloops, B.C., but was in Ottawa on Friday to hear the government's announcement.

In 2002, the engineer was living in Ottawa and returning from a vacation when he was arrested during a stopover at New York's JFK Airport. U.S. authorities deported him to Syria, where he was tortured.

Inquiry found Arar had no terrorist links

Ottawa set up a judicial inquiry into the case, led by Justice Dennis O'Connor, after Arar returned to Canada more than a year later.

O'Connor released his report in September 2006, concluding that Arar had no links to terrorist organizations or militants.

He also concluded the RCMP hadprovided misleading information to theU.S. authorities, which may have been the reason he was sent to Syria.

The government intends to implement the report's recommendations to ensure such an incident does not happen again, Harper said.

Earlier this week, U.S. Ambassador David Wilkins criticized Ottawa's efforts to have Arar removed from a U.S.security watch list, saying Washington alone will decide who to let into the country.

The prime minister said the government will continue to press the U.S. to remove Arar fromthe watch list.

"We believe the evidence is clear that Mr. Arar has been treated unjustly," Harper said.

Late Friday, Stockwell Day, Canada's public safety minister,said he will continue to discuss the watch list with American officials.

"The issue won't be closed," he told CBC News. "This conversation will come up again."

He said the American government has a sovereign right to put Arar on a watch list, but that doesn't mean the Canadian government won't go to bat for him.

The NDPsaid Friday's apology and settlement was overdue, saying Arar's wife Monia Mazigh should receive credit for pushing the government to acknowledge its role.

"From the beginning, New Democrats, along with countless Canadians from every corner of this country, stood side by side with Ms. Mazigh in her battle to bring her husband home to justice and to his family," said New Democrat MP Alexa McDonough.

A U.S. politician, meanwhile,said Friday afterthe apology was issued to Ararthat it is time for the U.S. to look at its role inthe Arar affair.

Senator Patrick Leahy, a Democrat who represents Vermont,said the U.S. government could have treated Arar differently than it did.

"The question remains why, even if there were reasons to consider him suspicious, the U.S. government shipped him to Syria where he was tortured, instead of to Canada for investigation or prosecution."

With files from the Canadian Press