Catalyzes hydrolysis of the D-alanyl-D-alanine dipeptide. D-alanyl-D-alanine + H2O = 2 D-alanine Binds 1 zinc ion per subunit. Can also be activated by other divalent cations such as iron, cobalt, or nickel. Inhibited by aminoalkyl phosphinate analogs. kcat is 4.7 sec(-1) with D-Ala-D-Ala. kcat is 1.8 sec(-1) with D-Ala-D-Ser. kcat is 0.35 sec(-1) with D-Ser-D-Ala. kcat is 0.005 sec(-1) with D-Ala-D-lactate. Optimum pH is 7-9. Homodimer. By vancomycin, mediated by VanS/VanR. Does not hydrolyze D-Ala-D-lactate, which remains intact for subsequent incorporation into peptidoglycan precursors. Production of precursors ending in D-Ala-D-lactate instead of D-Ala-D-Ala decreases affinity of vancomycin for the peptidoglycan chain and leads to vancomycin resistance (PubMed:7873524). Belongs to the peptidase M15D family.