New South Wales counter-terrorism police have charged two men alleged to have been involved in a plot to bring down a passenger plane, arrested in raids last weekend across Sydney.

Khaled Khayat, 49, from Lakemba and Mahmoud Khayat, 32, from Punchbowl have each been charged with two counts of preparing for, or planning, a terrorist attack.

The maximum penalty for the offence is life imprisonment.

Both men are due to face Parramatta Local Court on Friday morning.

Another man — arrested at Surry Hills — remains in police custody under the "specified time" provisions.

"This legislation recognises that terrorism investigations are complex and there can be legitimate reasons for extended periods of detention for suspects in such matters," the Australian Federal Police said in a statement.

Abdul Merhi, 50, was released from police custody about 7:00pm on Tuesday night without charge.

All four men were arrested on Saturday in raids across Sydney, with authorities alleging they were involved in a plot to bring down a passenger plane using an improvised device.

The NSW Joint Counter-Terrorism team raided several properties around the city, including in the suburbs of Lakemba, Punchbowl, Surry Hills, Wiley Park and Bankstown.

Aviation threat level returned to 'possible'

Earlier on Thursday, the threat level for Australian aviation was returned to possible, after being raised to probable last week.

Prime Minister Malcolm Turnbull announced the threat to attack an aircraft last week had been disrupted and contained.

Additional security measures were in place at Sydney airport and other major airports, causing major delays, however Mr Turnbull said he expected these to be modified within 24 hours.

He said there would still be enhanced security measures at airports but it would be done in a way that caused less delays to the travelling public.

"You should expect to receive advice from airlines within 24 hours that arrival times before a flight will be restored to those that previously applied — but some airlines differ," he warned.

He said the head of ASIO had decided to downgrade the aviation threat level.

Meanwhile, Australia's terror threat level, which is also set on the advice of ASIO, remained at probable.

The threat level was raised to probable in 2014, and since then 70 people have been charged as a result of 31 counter-terrorism operations around the country.