JOIN USSpeaking about the comment for the first time, Woods told a news conference at the Lakes Golf Club that the once firm friends had shaken hands and he now wanted to move on from the incident.
Williams said: "It was my aim to shove it up that black arsehole" at an awards ceremony in Shanghai last Friday, explaining why he had celebrated Adam Scott's Bridgestone Invitational win in August so enthusiastically.
"We talked about it this morning, we met face-to-face, we talked it through and we have agreed it was the wrong thing to say," former world number one Woods. "He did apologise, it was hurtful, certainly, but life goes forward."
"Stevie's certainly not racist, there's no doubt about that," Woods added. "I think it was a comment that shouldn't have been made and certainly one that he wished he didn't make."
The New Zealander caddied for Woods from 1999 until he was sacked in acrimonius circumstances earlier this year after helping the American win 13 major titles. "It was a tough decision to make to go in a different direction professionally," Woods recalled.
"I wasn't playing, I was injured, and I was trying to come back but I missed most of the major championships and he didn't want to miss them. That's understandable, wish I could have played them too."
Woods has slipped to number 58 in the world rankings and not bagged a title since winning the Australian Masters almost two years ago after being forced to deal with injuries and the fallout from revelations about his private life.