The admission comes after the data protection authority in Hamburg, Germany, called for an audit of the WiFi data recorded by Google's Street View cars.
In April, Google said its Street View cars collected only publicly broadcast WiFi network names and MAC addresses from WiFi routers for use by location-based products such as Google Maps for mobile, which enables people to find local restaurants or get directions.
The audit revealed that data being transmitted via open WiFi networks were also collected, which Google now says was unintentional.
According to Alan Eustace, senior vice-president of research and engineering at Google, some experimental code for sampling all categories of public broadcast WiFi data was included by mistake in the software used by the Street View cars.
"The project leaders did not want, and had no intention of using, payload data", he said in a blog post.
As soon as Google became aware of the problem, the company stripped out the data and have begun consultations with regulators on how best to dispose of it, said Eustace.
"We are acutely aware that we failed badly here. We are profoundly sorry for this error and are determined to learn all the lessons we can from our mistake", he wrote.
Google has suspended all collection of WiFi data using its Street View cars. It is to ask a third party to review the software and confirm that all data was deleted.
The firm also plans to review internal procedures to ensure there are controls in place to prevent similar problems in future.
Eustace said the incident highlights just how publicly accessible open, non password protected WiFi networks are, and that Google plans to introduce an encrypted version of Google Search this week.
This article was first published by Computer Weekly