Authorities detained five suspects, all men, in raids on Thursday night and Friday. Initially, three of the suspects were charged on Friday with preparing or planning a terrorist attack, The Associated Press reported. Authorities announced later in the day that a fourth man had been charged.
Hamza Abbas, 21, Ahmed Mohamed, 24, and Abdullah Chaarani, 26, did not enter pleas or apply for bail. They will appear in court next on April 28. Each faces a life sentence if convicted. The fourth man, a 22-year-old that authorities did not name, was also charged with preparing or planning a terrorist attack.
Four of the five suspects were born in Australia while the fifth was born in Egypt but holds dual citizenship.
The alleged plotters were under police surveillance prior to the raids and had moved quickly from the planning stages to being able to strike, authorities said.
Law enforcement officials said the suspects posed a serious threat, adding that it was one of the most substantial terrorist plots seen in the country in recent years.
"In terms of events that we have seen over the past few years in Australia, this certainly concerns me more than any other event that I've seen," Australian Federal Police Commissioner Andrew Colvin said.
The law enforcement operation, dubbed Operation Kastelholm, involved some 400 police officers and culminated with raids on five premises around Melbourne.
Victoria state Premier Daniel Andrews said there will be extra police on the streets of Melbourne on Christmas Day to make the public feel safe.
ABC News' Matt Foster and The Associated Press contributed to this report.