The man, 49, and his nine-year-old son were killed by falling rocks in the Blue Mountains near Sydney on Monday.
A woman, 50, and her son, 14, were taken to hospital with serious head and abdominal injuries. Her daughter, 15, was treated for shock.
Authorities said the family were on holiday in the popular tourist area when the accident happened.
“Unfortunately there’s been a landslip while they’ve been bushwalking. It’s quite a tragic scene,” said Supt John Nelson from New South Wales Police.
The woman and teenage boy had required sedation and intubation before being winched to safety and flown to hospital on Monday, paramedics said.
The teenage girl was also taken to hospital and was “extremely distressed”, according to authorities.
“We’ve focused on caring for her while the best medical care is given to her mum and brother and just trying to get that support for the young 15-year-old,” said Supt Nelson.
Authorities had to wait until Tuesday to recover the bodies of the man and boy, describing it as “extremely dangerous” terrain.
Details of the victims, including where they are from in the UK, has not been released at this stage. The Foreign Office said it was “providing consular support to the family of a British couple and their children following an incident in Australia” and that it was in contact with local authorities.
Like much of Australia’s east coast, the Blue Mountains has been lashed by weeks of heavy rain.
Some walking tracks have been closed “due to flood damage and ongoing rockfall risk”, according to NSW National Parks and Wildlife Service website.
But a spokesman said the track at Wentworth Falls had recently been deemed safe.
“The walking track where this incident occurred was inspected in the days before the rockslide as part of a routine track assessment programme,” he told the Australian Broadcasting Corporation.
“Unfortunately, it is not possible to predict and eliminate all natural risks such as rockslides, which can occasionally occur around the state.”
Following the removal of the bodies, the New South Wales Department of Environment and Heritage announced the area would be closed to the public until further notice and a “comprehensive review” would be undertaken.
New South Wales premier Dominic Perrottet described it as a “tragic” incident and said he would seek advice on whether the walking track should have been open, given recent heavy rain.
“These tragedies occur too often so anything we can do to keep people safe, we will,” he told the Australian Broadcasting Corporation.
“Obviously, the Blue Mountains is a place where people love to go trekking. It’s one of the wonders of the world but when those tragedies occur it would be remiss of any government not to act.”