NSW police said Lily Hooper's body was recovered from Nattai National Park and airlifted out after an eight-day search involving about 1,000 people.
Within 30 minutes of officials saying the 18-year-old hiker had been found alive with half a bottle of water, authorities corrected the account and confirmed she was dead.
Chris Minns and police commissioner Mal Lanyon apologized to Hooper's family, who briefly believed she was alive, while police opened an investigation into the communication failure.
Mike Wassing said coded language is often used in major searches to avoid broadcasting sensitive details, and police said they will review protocols as a post-mortem is prepared to confirm identity and cause of death.