Najib Razak stopped short of saying flight MH370, which left Kuala Lumpur for Beijing last Saturday, had been hijacked, stressing "all possibilities" were being looked into.
Earlier, a Malaysian government official said investigators had concluded this was the case.
The unnamed official told the Associated Press one or more people with significant flying experience hijacked the jet, switched off communication devices and steered it off-course.
Mr Razak said final satellite communication with the Boeing 777 came more than six and a half hours after it disappeared from civilian radar at 1.30am on March 8.
In this period the aircraft changed direction and passed back over the Malaysian peninsula towards the Indian Ocean.
The search now encompasses two "corridors" - a northern corridor from the border of Kazakhstan and Turkmenistan through to northern Thailand, and a southern corridor from Indonesia to the southern Indian Ocean.
The plane first lost contact with air traffic controllers in the South China Sea, and Mr Razak said the search there would be called off.
He said: "Clearly the search for MH370 has entered a new phase. We hope this new information brings us one step closer to finding the plane."
Another news conference is due to be held at 9:30am GMT.
Earlier, a source close to the investigation said satellite pulses picked up from the flight show it may have been flying off-course for several hours before running out of fuel over the Indian Ocean.
Analysis of military radar tracking and pulses has provided two different theories as to what may have happened to the plane, the unnamed source said.
The electronic signals are believed to have been transmitted for up to five hours after ground control lost contact with the aircraft, according to Sky sources.
The signals are 'pings' sent by the plane to confirm it is still there and to allow the network to determine its position.
The source close to the investigation said the most likely possibility is that after travelling northwest, the Boeing 777 made a sharp turn to the south, over the Indian Ocean where officials think, based on the data, it flew until it ran out of fuel and crashed into the sea.
The other interpretation is the plane continued to fly to the northwest and headed over Indian territory.
But the source said it was believed unlikely that the plane flew for any length of time over India because that country has strong air defence and radar coverage which should have allowed authorities to see the plane.
Malaysia's acting transport minister Hishammuddin Hussein has confirmed the search had been expanded into the Indian Ocean - on the opposite side of Malaysia from where contact was lost seven days ago.
The plane's communication with air traffic control was severed just under one hour into its flight from Kuala Lumpur to Beijing.
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