Seven people were arrested in Melbourne overnight after allegedly preparing for a terrorist plot involving explosives at high-profile locations, possibly on Christmas Day.
They were arrested at properties in Flemington, Meadow Heights and Dallas in Melbourne over the alleged plot, which police said was inspired by the Islamic State (IS) group.
Abdullah Chaarani 26 of Dallas, 21-year-old Hamza Abbas of Flemington and 24-year-old Ahmed Mohamad of Meadow Heights have been charged with planning a terrorist attack.
The trio appeared in the Melbourne Magistrates Court and were taken into custody and will return in April.
Another man remains in custody and will appear in court on Saturday.
The three others arrested were released without charge this afternoon.
Victorian Premier Daniel Andrews described the plot as an "act of evil", while Victoria Police Chief Commissioner Graham Ashton said police had seized "the makings of an improvised explosive device".
Speaking at a press conference today, Mr Turnbull said: "Overnight our police and security agencies have disrupted a very substantial terrorist plot.
"Overnight, the Victoria Police, working with the Australian Federal Police and ASIO, have arrested seven persons, five of whom are still in custody, searched five premises and are continuing to search them.
"What they have uncovered is a plot to explode improvised explosive devices in central Melbourne in the area of Federation Square, on or about Christmas Day.
The raids were part of a counter-terrorism operation involving Victoria Police, the Australian Federal Police and ASIO.
Federation Square, Flinders Street Station possible targets
Commissioner Ashton said it was believed a number of people were intending to carry out an attack involving explosives and other weapons.
"Over the last fortnight … we have had to conduct a criminal investigation relating to the formation of what we believe was a terrorist plot," he said.
Police believe the locations to be targeted include Federation Square, Flinders Street Station, and St Paul's Cathedral.
Commissioner Ashton said: "We believe [the plot] was going to involve an explosive event, the use of explosives, and we gathered evidence to support that.
"There has also been evidence that we will lead around the possibility of an intention to use other weapons. That could include knives and/or a firearm.
"This is not an act of faith. What was being planned, what will be led in evidence, what the police will allege, was not an act of faith, not an act of religious observance, it was, instead, in its planning, an act of evil, a criminal act," he said.
A 24-year-old man from Meadow Heights, a 26-year-old man from Dallas, a 22-year-old man from Campbellfield, a 21-year-old man from Flemington and a 21-year-old man from Gladstone Park remain in police custody.
A 20-year-old woman and a 26-year-old man, both from Meadow Heights, were released without charge.
The five people in custody were expected to face court this afternoon, charged with acts in preparation of a terrorist event, Commissioner Ashton said.
Commissioner Ashton said four of the five were Australian-born.
"The age groups range between 20 and 24 or 25. There is another suspect in this matter who will be charged that was an Egyptian-born Australian citizen. All the others were Australian-born," he said.
Premier Daniel Andrews said there would be an increased police presence at large gatherings in Victoria over the Christmas period.
"I want to thank each and every one of the 400 members of the Victoria Police and AFP [Australian Federal Police] who have been part of these raids, these arrests, and all of those others who work every hour of every day, keeping a very close watch on all of those persons of interest," he said.
"Victorians should go about their business at this very special time of the year."