A man has been arrested in NSW after he allegedly advised Islamic State overseas on how to develop "high-tech weapons capability".
Prime Minister Malcolm Turnbull on Tuesday said the 42-year-old man was arrested in Young in relation to terrorism offences which didn't relate to any planned domestic attack.
"Police will allege that this individual, in a regional centre, acted with intent to provide ISIL (Islamic State) with the capability, with the technical capability, and high-tech capability, to detect and develop missiles," Mr Turnbull told reporters in Canberra.
"This highlights that terrorism, support for terrorist groups, and Islamist extremism is not limited to our major cities."
Mr Turnbull said the incident was "yet another reminder of the enduring threat we face from Islamist terrorism".
While Islamist terrorism remained a global challenge the prime minister said the Australian public should not be cowed by the terrorists.
"They want to divide us, they want us to turn on each other - we will not let them succeed," he said.
Mr Turnbull said security and police agencies had once again done their job but those authorities relied upon good intelligence from the community.
Justice Minister Michael Keenan said the arrest was the result of an 18-month investigation.
"It reminds us that whether you are in a capital city planning an attack on home soil or whether you are in a small country town trying to assist the terrorist state in the Middle East, you will get caught," Mr Keenan said.
The 42-year-old was an Australian-born citizen who'd been working as an electrician, authorities said.
It's expected he'll appear in Young Local Court later on Tuesday.
Federal Police Commissioner Andrew Colvin said the man would be charged with two foreign incursion offences which carried a maximum penalty of life imprisonment.
The man allegedly researched and designed a laser warning device to help warn against incoming guiding munitions used by coalition forces in Syria and Iraq, Mr Colvin said.
"Secondly, we will also allege that he has been researching, designing and modelling systems to assist ISIL's efforts to develop their own long-range guided missile capabilities," he told reporters in Canberra.
It was "extremely concerning" for police to continue seeing Australians providing support to extremists groups, the commissioner added.
The 42-year-old is alleged to have networks and contacts in Islamic State.
Mr Colvin said those contacts were not necessarily in conflict zones "but in other parts of the world as well and he has been relying on them to pass this information".
It's alleged the man acted alone in Young.