Scott Morrison has cut short his family holiday in Hawaii and will return to Australia on Saturday after the deaths of two volunteer firefighters.
The prime minister says he "deeply regrets" any offence taken after going on vacation during the bushfire crisis, which has triggered a state of emergency in NSW.
Intense bushfires are raging up and down the country's east coast and millions of people are choking through thick smoke.
"I deeply regret any offence caused to any of the many Australians affected by the terrible bushfires by my taking leave with family at this time," Mr Morrison said on Friday.
"I have been receiving regular updates on the bushfires disaster as well as the status of the search for and treatment of the victims of the White Island tragedy."
Two volunteer firefighters were killed in a vehicle turnover near Buxton, south west of Sydney, on Thursday night.
"Given these most recent tragic events, I will be returning to Sydney from leave as soon as can be arranged," Mr Morrison said.
The prime minister has been heavily criticised for going on holidays in the middle of a bushfire emergency.
He has also come under fire for trying to keep details of his overseas trip a secret.
Emergency Management Minister David Littleproud said the prime minister had made the right call by coming home early.
"Obviously you cannot predict mother nature," Mr Littleproud told reporters in Queensland.
"As this has intensified, obviously the prime minister has made the decision that he needed to come back.
"Now, retrospectively, it might have been great to know and he possibly may not have taken his leave, but obviously he is still a human being and we all need time to recharge."
Mr Morrison was due to fly back on Monday but will return to Sydney on Saturday.
His wife and daughters will remain in Hawaii.
The prime minister said Australians would understand the situation and be pleased he was coming home.
"They know that, you know, I don't hold a hose, mate, and I don't sit in a control room," he told Sydney radio 2GB.
"But I know that Australians would want me back at this time out of these fatalities, so I'll happily come back and do that."
Mr Morrison said he tried to surprise his daughters with the trip to Hawaii.
"It's just unfortunate that it's come at such an awful time, particularly for those living in and around Sydney and NSW," he said.
"It's just devastating to be here and see what's happening there, so I'm pleased to be returning."
Opposition Leader Anthony Albanese said the prime minister's leave was a matter for him.
"He made the decision and it's a matter for his judgement when he goes on holiday," Mr Albanese told reporters at a bushfire ground outside Sydney.
"I think one of the issues has been the lack of information and transparency around this."
He also criticised the prime minister for earlier suggesting volunteer firefighters "wanted to be" battling the relentless blazes.
"Those comments are inappropriate, these people don't want to be out fighting fires, they're doing it because of their commitment to their fellow Australians," Mr Albanese said.
The prime minister expressed condolences and sympathies to the families of the two firefighters killed, saying their sacrifice and service would be forever remembered.
Australian Associated Press