"I have nothing to hide," the outgoing chief executive said in an emotional speech to lawmakers in the southern city's parliament after he became the first Hong Kong leader to face a corruption probe.
"I promise everyone... I will cooperate fully," he added, referring to an investigation launched this week by the Independent Committee Against Corruption (ICAC).
Tsang's speech was interrupted by angry calls for his resignation, as tempers flared over his trips on luxury jets and yachts belonging to wealthy businessmen with major commercial interests in Hong Kong.
The bow-tie wearing career bureaucrat, whose term expires in June after seven years as the city's effective mayor, appeared to hold back tears as he apologised for any misunderstanding over the "incidents".
"The series of incidents have caused concerns from the public, media, lawmakers and civil servants, and shaken public confidence in the government. I hereby solemnly apologise to the public," he said.
"Regardless of whether you still trust me, please do not lose faith in the Hong Kong system."
Opposition lawmakers and media analysts have lambasted Tsang since photographs of him enjoying a weekend on a tycoon's luxury yacht in the gambling playground of Macau appeared in local newspapers last month.
Subsequent reports that the chief executive would retire to a cut-price penthouse apartment belonging to a wealthy property developer in Shenzhen further embarrassed the straight-laced leader.
Tsang has not denied the reports, and added grist to the mill when he admitted to taking several trips on tycoons' private jets in an apparent bid to portray such activity as a normal part of a Hong Kong leader's routine.
Public anger over the cosy relationship between government and big business, especially property developers, is never far from the surface in the former British colony of seven million people.
But it was stoked by Tsang's refusal to identify his rich friends or explain exactly what arrangements he made with them in return for their largesse.
He offered some new details on Thursday, telling lawmakers he paid HK$500 ($64) for his weekend trip to Macau, HK$5,900 for a trip to Phuket, Thailand on a private jet, and would have paid HK$1 million a year for the apartment.
After discussing the controversy with his wife, he said he had decided not to rent the apartment after all.
"Some residents now think the chief executive is corrupt," he said.
"I have always abided by the rules but I admit there is a gap between public expectation and the handling of this issue, which has led to public disappointment and questions about my integrity.
"I am here not to restore people's confidence towards me, but to restore public confidence towards the government's system."
As he stepped into the chamber, some lawmakers shouted "Donald Tsang step down".
Others held placards with slogans such as "Corrupt bow-tie, resign now" and calling for direct elections instead of the quasi-democratic system installed under the terms of the British handover to Chinese rule in 1997.
"This is unprecedented, it's the first time that a chief executive is investigated by the ICAC," Liberal Party chairwoman Miriam Lau told the assembly.
New People's Party chairwoman Regina Ip said: "We are deeply embarrassed with the double standards and the poor example that the chief executive has set."
Tsang rejected calls from some lawmakers for him to stand down pending the outcome of the investigation.