Police shot dead a "known terror suspect" who stabbed two officers, a day after the ISIL group called for Muslims to indiscriminately kill Australians.
The 18-year-old, reportedly associated with the al-Furqan group, was killed on Tuesday evening after arriving at a police station on the outskirts of Melbourne to attend a "routine" interview.
He greeted two members of the joint counter-terrorism team with a handshake before pulling out a knife and repeatedly stabbing both men. One officer fired a single shot that killed him, police said.
"I can advise that the person in question was a known terror suspect," said the justice minister Michael Keenan on Wednesday. "It appears that the shooting by the police officer was in self-defence."
Victoria state police chief Ken Lay said the teenager "had one thing on his mind, and that was to do the most amount of harm to these two people as he could".
"We were aware of this young man and had been for number of months. The fact that the joint counter-terrorism task force was doing work around him indicates our level of concern," he told Fairfax radio.
The acting federal police commissioner, Andrew Colvin, later on Wednesday said the attacker had his passport cancelled about a week ago on national security grounds.
Bruce Giles, a Victoria police commander, said reports that the man had earlier been waving the ISIL flag were being investigated.
The two stabbed officers were in serious conditions, hospital staff said.
It was not immediately clear whether the violence was related to a recent call from ISIL to its supporters to kill in their home countries.
On Monday, the Australian Prime Minister Tony Abbott said the balance between freedom and security "may have to shift", and outlined broad new security powers expected to be introduced to parliament on Wednesday.
More than 800 police were involved in a security operation in Sydney and Brisbane last Thursday, which authorities said had thwarted a plot linked to ISIL to behead a member of the public.
Australia is concerned over the number of its citizens believed to be fighting overseas with militant groups, including a suicide bomber who killed three people in Baghdad in July and two men shown in images on social media holding the severed heads of Syrian soldiers.
Abbott has said that at least 100 Australians are in the Middle East either fighting with or supporting Islamic State or other militant groups, a number that he said has increased in recent months.
At least 20 are believed by authorities to have returned to Australia and pose a security risk, and 60 people have had their passports cancelled. Earlier this month, the national security agency for the first time raised its four-tier threat level to "high".
Highlighting the threat posed by returning fighters, Australia was swift to commit troops and aircraft to a U.S.-led coalition fighting Islamic State militants in Iraq and Syria earlier this month.
United States and Arab allies on Tuesday bombed militant groups in Syria for the first time, killing scores of Islamic State fighters and members of a separate al Qaeda-linked group.
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