INTERNATIONAL NEWS - The 20-year-old man will be charged with terrorism offences that carry a maximum penalty of life in prison, authorities said.
Police allege the man had planned to shoot people with an automatic gun at Federation Square in the city's centre.
There is no ongoing threat to the public, police said.
Authorities said the man had not obtained an automatic weapon before his arrest in Werribee, a Melbourne suburb, on Monday.
"What we will be alleging is that he was intending to use a firearm to shoot and kill as many people as he could," Victoria Police deputy commissioner Shane Patton said on Tuesday.
"This is a person who would become particularly energised, 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."
