"This is a person who would become particularly energized, for a lack of a better word, when overseas events occurred and would express a great deal of interest in committing an attack himself".
"The arrest means this threat has been removed, we are quite confident there is no risk or no threat to the Victorian community now we have removed him from society and he is being interviewed".
Patton said the purported plan included firing into crowds during New Year's Eve festivities at Melbourne's Federation Square.
"The allegations are that he was planning to commit a terrorist act and that he attempted to obtain a gun to do so", Victoria Police Deputy Commissioner Shane Patton said.
Victoria Police says the operation is ongoing, however police do not anticipate further arrests.
As the end of the year celebrations near, Australian Justice Minister Michael Keenan has told the public to expect increased police presence.
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Patton said the suspect was born in Australia to Somali parents and had been monitored by police as a "person of interest" since January.
Since September 2014, when the national threat terrorism level was raised to "probable", the AFP has worked with its state and territory partners to thwart a number of plots.
One of the charges carries a maximum life in prison sentence.
The man worked part-time at a computer fix business and police raided the facility.
Terror teens, Oct 2016: Two 16-year-old boys charged with allegedly preparing a terrorist act and being members of a terrorist organisation after they were arrested carrying bayonet-type knives near a Western Sydney prayer hall.
The unnamed man was born in Australia to Somali parents, but was not linked to any mosque, according to Patton, and he had been monitored by the police since a year ago as a "high-risk person of interest".