Police have allegedly foiled a plot to use an automatic rifle to carry out a terror attack at Federation Square on New Year's Eve.
The Australian-born Werribee man, 20, was arrested on Monday during raids carried out by Victoria police, AFP and ASIO officers on homes at Meadow Heights and Werribee, as well as a commercial property at Footscray.
"What will be alleging is that he was intending to use a firearm to shoot and kill as many people as he could in the Federation Square area on New Year's Eve," said Victorian Deputy Commissioner Shane Patton.
Joint Counter Terrorism Team investigators have confirmed he did not source a weapon and had been under police surveillance as a high risk suspect since the beginning of 2017.
He is still being questioned and is expected to be charged with Acts in Preparation to Commit a Terrorist Attack and Collecting Documents to Facilitate a Terrorist Act, contrary to the Commonwealth Criminal Code Act.
They are still investigating how the man, who is of Somalian descent, had been radicalised.