This paper reports on ab initio numerical simulations of the effect of Co and Cu dopings on the electronic structure and optical properties of ZnO, pursued to develop diluted magnetic semiconductors vitally needed for spintronic applications. The simulations are based upon the Perdew-Burke-Enzerh generalized gradient approximation on the density functional theory. It is revealed that the electrons with energies close to the Fermi level effectively transfer only between Cu and Co ions which substitute Zn atoms, and are located in the neighbor sites connected by an O ion. The simulation results are consistent with the experimental observations that addition of Cu helps achieve stable ferromagnetism of Co-doped ZnO. It is shown that simultaneous insertion of Co and Cu atoms leads to smaller energy band gap, redshift of the optical absorption edge, as well as significant changes in the reflectivity, dielectric function, refractive index, and electron energy loss function of ZnO as compared to the doping with either Co or Cu atoms. These highly unusual optical properties are explained in terms of the computed electronic structure and are promising for the development of the next-generation room-temperature ferromagnetic semiconductors for future spintronic devices on the existing semiconductor micromanufacturing platform.