Anthony Albanese said no-one would mourn Ayatollah Ali Khamenei, who has served as Iran's supreme leader since 1989 and has been accused of orchestrating numerous human rights abuses.
The Ayatollah was killed in a wave of missile attacks, according to US and Israeli leaders and later confirmed on Iranian state media.
Tehran has launched counter attacks on a number of countries, throwing travel plans into chaos as air routes were shut down.
An apparent drone strike left a luxury hotel in Dubai aflame, while other buildings and the city's airport - which is a major travel hub - suffered minor damage.
Flights across the region have been cancelled or turned around, creating travel chaos for many visiting or being routed through major Middle East aviation hubs.
Prime Minister Anthony Albanese said Australia would do what it could for stranded travellers, but he warned the government's ability to help was limited by a lack of diplomatic staff in the region.
"We're doing this on an hour-by-hour, minute-by-minute basis," he told reporters on Sunday.
Australia severed diplomatic ties with Iran in 2025, after spy agency ASIO accused Tehran of orchestrating two attacks on Jewish sites in Sydney and Melbourne.
The prime minister backed the US-Israeli strikes but called for civilians to be protected while dodging questions about the legality of the attacks, saying that was a matter for the countries involved.
"We support the United States acting to prevent Iran from obtaining a nuclear weapon and to prevent Iran from continuing to threaten international peace and security," he said.
"Australia stands with the brave people of Iran in their struggle against what is an oppressive regime."
UN officials have condemned the pre-emptive strikes, which US President Donald Trump said were intended to end Iran as a security threat.
Foreign Minister Penny Wong played down the likelihood of Australian troops becoming involved in the conflict, even if there was the potential for a change of Iranian leadership.
"Ultimately, Iran's future must be determined by the people of Iran ... you would not expect us to participate," she said.
Australia has issued "do not travel" warnings for Israel, Lebanon, Bahrain, Kuwait, Qatar and the United Arab Emirates as tensions escalate, and is urgently verifying if any citizens have been caught up in the conflict.
Senator Wong confirmed Australian leaders were not told in advance about the strikes.
US President Donald Trump urged the Iranian people to rise up against the regime, declaring "the hour of your freedom is at hand".
Iranians have reported internet and phone lines being disconnected after the attacks - a common occurrence when military tensions rise.
James Younessi, an Iranian-Australian doctor who lives in Sydney, said during small windows of phone communication he'd heard stories of people celebrating the assault.
"People (are) in the street jubilating, singing, dancing, passing chocolates and lollies to one another," he told AAP.
Dr Younessi said he was glad to see the demise of the Ayatollah but would have preferred to see him face trial for his crimes.
The federal opposition has welcomed the US strikes, with frontbencher Tim Wilson saying the Iranian leader's death made the world a safer place.
"The aim should be that the Iranian people take control of their destiny," he told the ABC's Insiders program.
