Authorities hauled a Werribee, VIC man before Melbourne Magistrates' Court on charges of allegedly preparing to commit a terrorist attack.

Deputy Commissioner Shane Patton said 20-year old Ali Ali plotted to obtain an automatic rifle to "shoot and kill as many people as he could" around Melbourne's Federation Square during New Year's Eve celebrations, when half a million people typically show up.  "This is a person who would become particularly energized, for a lack of a better word, when overseas (terrorism) events occurred and would express a great deal of interest in committing an attack himself," Patton said.

Police say Mr. Ali sought out and downloaded Al Qaeda materials, including instructions on how to mount a terrorist attack.  He also allegedly expressed support for the so-called Islamic State.

Authorities say the public is not in danger, and the arrest of Ali on Monday afternoon at a home in Melbourne's southwest removed the threat.