The Turkish presidency claims Erdogan's comments were in response to the manifesto released by the man responsible for the New Zealand massacre.
A senior aide to Turkish President Recep Tayyi Erdogan says the leader's comments to send anti-Muslim Australians "back in coffins", in the wake of the Christchurch massacre, were "taken out of context".
On the campaign trail, the Turkish leader is believed to have used video footage of the terror attack that killed 50 people and painted it as part of an assault on Turkey and Islam.
Erdogan had also warned that anti-Muslim Australians would be "sent back in coffins" like their grandfathers at Gallipoli, a blood-drenched WWI battle.
More than 8,000 Australians died fighting Turkish forces at Gallipoli, which has a prominent place in the Australia's collective memory.
Australian Prime Minister Scott Morrison on Wednesday condemned "reckless" and "highly offensive" comments, warning he would consider "all options" in reviewing ties.
"Remarks have been made by the Turkish President Erdogan that I consider highly offensive to Australians, and highly reckless in this very sensitive environment," he Morrison said after summoning the Turkish ambassador and dismissing the "excuses" offered.
President Erdogan's office on Wednesday said the remarks were taken out of context.
Now a senior aide to Erdogan has said the Turkish leader was in fact responding to the manifesto released by the killer.
It mentions Turkey and the minarets of Istanbul's famed Hagia Sophia, now a museum, that was once a church before becoming a mosque during the Ottoman empire.
"President #Erdogan's words were unfortunately taken out of context," Fahrettin Altun, communications director for the Turkish presidency, wrote on Twitter.
Mr Altun said President Erdogan's comments were in "a historical context of attacks against Turkey, past and present", in a speech delivered on the 104th anniversary of the Gallipoli campaign.
"Turks have always been the most welcoming & gracious hosts to their #Anzac visitors," he added, referring to Australian and New Zealand veterans and families.
Morrison earlier described claims about Australia and New Zealand's response to the white supremacist attack as "vile."
Morrison said Australians travelling to Turkey should exercise common sense and cautioned that travel advice for Turkey was under review.
"I will wait to see what the response is from the Turkish government before taking further action, but I can tell you that all options are on the table," Morrison said.
In fiery remarks, Morrison accused Erdogan of betraying the promise of Mustafa Kemal Ataturk - the father of modern state and a revered figure in the Turkey - to forge peace between the two countries.
A memorial at the battlefield carries Ataturk's words: "There is no difference between the Johnnies and the Mehmets... after having lost their lives on this land they have become our sons as well."
"Ataturk sought to transform his country into a modern nation and, an embracing nation, and I think these comments are at odds with that spirit," Morrison said.
Erdogan had already been sharply rebuked by New Zealand for his comments and for using gruesome video shot by the Christchurch mosque gunman as an election campaign prop.
New Zealand's Deputy Prime Minister Winston Peters protested on Monday that such politicisation of the massacre "imperils the future and safety of the New Zealand people and our people abroad, and it's totally unfair".
Peters announced on Tuesday that he would be travelling to Turkey this week at Istanbul's request to attend a special meeting of the Organisation of Islamic Cooperation.
Three Turkish nationals were wounded in the rampage that killed 50 worshippers at the mosques in the southern New Zealand city.
The accused gunman, a self-avowed white supremacist from Australia, livestreamed much of the attack and spread a manifesto on social media claiming it was a strike against Muslim "invaders".
"This is not an isolated event, it is something more organised," Erdogan had said during a campaign event on Monday in Canakkale in western Turkey.
"They are testing us with the message they are sending us from New Zealand, 16,500 km (10,250 miles) from here."
Erdogan did not project the video at the Monday event.
Peters said he had complained directly to visiting Turkish Vice-President Fuat Oktay and Foreign Minister Mevlut Cavusoglu.