Lily Hooper disappeared on August 12 after going on a hike in the Nattai National Park in NSW's Southern Highlands.
The 18-year-old from Oakdale, in Sydney's southwest, did not return that evening and could not be contacted on her mobile phone, triggering a wide-scale search.
Authorities found the body, which has not yet been formally identified but is believed to be Ms Hooper, in bushland about 11.30am on Thursday, NSW Police said in a statement.
Ms Hooper had not been seen since August 12 and her car was discovered at the Bonnum Pic trailhead the same night.
The police statement followed a number of initial media reports Ms Hooper had been found alive.
Her parents expressed relief to the media before being told by officers that their daughter may not be alive, according to the Nine newspapers.
NSW Premier Chris Minns initially told a parliamentary hearing Ms Hooper had been found alive before later interrupting proceedings for a second time to apologise for the error.
"I've got some terrible news … but it seems as if the early advice was wrong and Lily's body's been found and she's been found deceased," the visibly distressed premier said.
"This is obviously devastating, and I'm just profoundly sad for a family and for all those concerned."
The hearing's chair - Legalise Cannabis MP Jeremy Buckingham - also offered condolences to Ms Hooper's family and everyone impacted by the devastating news.
Mr Minns earlier told the hearing Ms Hooper had been found alive with half a bottle of water on her and thanked NSW Police, SES, the Australian Defence Force and hundreds of volunteers who helped with the search effort.
Speaking to media on Monday, Detective Inspector Brendan Bernie said police were determined to find the "experienced bushwalker" alive.
"We're relying on that experience to get her through this ordeal," he said.
A report will be prepared for the coroner.
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