Tutu's plea is contained in an eight-page affidavit, in which the former chairman of the Truth and Reconciliation Commission voices his frustration with the government's response to the TRC's work.
Nobel laureate Tutu pulls no punches in tackling the approach adopted by the government and President Thabo Mbeki, who has denounced the reparations lawsuits.
The archbishop has, until now, refrained from commenting on the government's position on enforcing reparations by sanctions-busters, a move supported by the TRC report.
Tutu told a New York court, where reparations claims have been lodged, that the government's "assertion that adjudication of these lawsuits would be at odds with the TRC, or otherwise undermine reconciliation in South Africa", was a non-sequitur.
"Compensation could promote reconciliation, by addressing the needs of those victims dissatisfied with the small monetary value of TRC reparations," his statement to New York district court Judge John Sprizzo read.
Tutu, who is in England, teaching at his old university, Kings College, made the affidavit last month on behalf of the Ntsebeza class action suit - one of four groups which have filed claims in the US against multinational companies and banks which propped up the apartheid state.
Asked for comment, counsel for the claimants, advocate Dumisa Ntsebeza, said he was "extremely pleased" with Tutu's contribution.
Joel Netshitenzhe, the government's chief spokesperson, said if the archbishop had discussed the issue with the minister of justice, Penuell Maduna, he would have had a clearer understanding of the government's position on the litigation in the United States.
"This is: That not settling the matter (of apartheid victims) inside South Africa has profound implications for the future of the country... for investment and job creation," Netshitenzhe said.
Judge Sprizzo heard arguments from claimants and defendants in November, and said he would hand down judgment on the validity of the cases by the middle of this month.
But lawyers speculate that he may postpone a decision, in anticipation of a judgment by the highest American court, the US Supreme Court, on similar issues.
It is, however, widely expected that Sprizzo will dismiss the lawsuits, especially after the South African government came out strongly against it, alongside big business.
The TRC has identified about 22 000 victims of gross human rights violations during apartheid, but could make only recommendations about reparations.
The government agreed to pay individual victims about a fifth of the recommended amount. However, in his statement to the court, Tutu clearly expressed dissatisfaction with the compensation.
The civil claims are, however, brought on behalf of a much broader category of victims.
"It was never contemplated by the TRC that victims of apartheid would be precluded from seeking compensation through the ordinary civil process," Tutu stated.
Legally, victims are only precluded from bringing civil claims against perpetrators granted amnesty.
The TRC's final report last year, supported claims against foreign and local corporations that propped up and benefited from apartheid, saying the litigation could "be based on the extent to which decades of profits were based on systemic violations of human rights. In legal terms, this could be based on the principle of 'unjust enrichment'", the TRC stated. "Unjust enrichment is a source of legal obligation."
Maduna has written twice to Sprizzo urging him to dismiss the lawsuits, arguing that they would discourage "much-needed foreign investment and delay the achievement of the government's goals".
"It would make little sense for the government to support litigation, which not only sought to impose liability and damages on corporate South Africa, but which, in effect, sought to set up the claimants as a surrogate government," Maduna wrote in the middle of last year.
In turn, Tutu wrote that Maduna's allegations were without merit.
The lawsuits are mainly aimed at firms that ignored UN sanctions and which, allegedly, aided and abetted the apartheid regime.