Andrew Quah, 22, a music teacher, admitted that the photographs had embarrassed his party and made his candidacy untenable.
"But that's not my penis," Quah said in reports. "Look, maybe somebody photoshopped it, and put another one on the photo. I can tell you, it's not me. I know these things. But really, I can't remember.
"I might have been drunk off my face, or my political enemies might have drugged me. It was a mistake that I would not have committed had I been of right mind. All I know, I have been humiliated."
Quah also has admitted to looking at adult websites in the past two weeks, which contradicts the Family First party's strong commitment to protect children by making adult material harder to access on the Internet.
Family First leader Steve Fielding over the weekend removed Quah as the party's candidate for a House seat representing part of Sydney.
"Andrew has admitted to the party that two of the photos were of himself, but he denied that a third photo was of himself," party spokeswoman Felicity de Fombelle told Reuters. "He denied uploading the photos, but he also admitted that he personally used pornography, so his views are at odds with the values of the party."
Quah said the photos were more than two years old and may have been taken while he was drunk. He admitted he did pose for two photos in an "inappropriate position."
"I hope that my behavior will not reflect badly on my colleagues and friends who share the desire to make Australia the best place in the world to raise a family," he said.
Quah had been a member of Family First for 11 months, de Fombelle said.
Family First was founded in 2002 and its first successful candidate was a former Assemblies of God pastor who won a place in South Australia's state parliament. In 2004 the party won a national Senate seat, running on a secular platform with strong religious roots.
Family First candidates have made crucial voting deals with the conservative Liberal Party of Prime Minister John Howard, who is fighting an uphill battle in the Nov. 24 national election.