We use hydrodynamical simulations to study the color transformations induced by star formation and active galactic nuclei (AGN) during major mergers of spiral galaxies. Our modeling accounts for radiative cooling, star formation, and supernova feedback. Moreover, we include a treatment of accretion onto supermassive black holes embedded in the nuclei of the merging galaxies. We assume that a small fraction of the bolometric luminosity of an accreting black hole couples thermally to surrounding gas, providing a feedback mechanism that regulates its growth. The encounter and coalescence of the galaxies triggers nuclear gas inflow which fuels both a powerful starburst and strong black hole accretion. Comparing simulations with and without black holes, we show that AGN feedback can quench star formation and accretion on a short timescale,particularly in large galaxies where the black holes can drive powerful winds once they become sufficiently massive. The color evolution of the remnant differs markedly between mergers with and without central black holes. Without AGN, gas-rich mergers lead to ellipticals which remain blue owing to residual star formation, even after more than 7 Gyrs have elapsed. In contrast, mergers with black holes produce ellipticals that redden much faster, an effect that is more pronounced in massive remnants where a nearly complete termination of star formation occurs, allowing them to redden to u-r ~ 2.3 in less than one Gyr. AGN feedback may thus be required to explain the population of extremely red massive early type-galaxies, and it appears to be an important driver in generating the observed bimodal color distribution of galaxies in the Local Universe.