The lifeguard turned away for a moment and when he turned back he saw all four caught in the rip, and immediately headed out to help them.
"I could see what was going to happen. By the time I looked around again they were in the rip and in the hole," he said.
"I jumped straight into it - the water was over my head."
He grabbed one of the children, 7, and took him back to the sand bar, sending him towards shore, then returned for the other two.
"I had the 9-year-old under my left arm and the 6-year-old under my right arm," he said. The woman was holding onto the tube he'd brought out.
While he was holding the two children the woman, who was around her 30s, pulled up the T-shirt she was wearing and put it over the lifeguard's head saying "God bless you, God bless you".
"It was stuck on my face and over my mouth," he said.
"I can't fight you, I've got two kids under my arms!"
As soon as he said "God bless you" back, however, the woman let him go.
He managed to walk the two children back to shore, telling them "don't fight the rip, use the rip".
"They were freaking out," he said.
"They'd just had a near death experience".
The lifeguard said he sat the children down on the beach and asked if they knew the woman, and they told him she was their auntie.
The lifeguard called the police, who showed up and spoke to the woman. She left with them, but was not in custody, he said. He said it was important that kids coming to the beach came with a responsible adult.
Wanganui surf club spokesman Phil Gilmore said it was lucky the lifeguard was there, otherwise there "very likely" could have been four fatalities.
Mr Gilmore said the lifeguard was an experienced surf lifesaver who had been working there about 25 years.
He said Wednesday's incident highlighted the need for safe swimming.
The police were unavailable for comment on the incident.