Three men charged with plotting a terror attack in Melbourne were nabbed after an investigation spanning more than 12 months.

Phone calls, text messages and thousands of hours of recorded conversations will be key to their prosecution, a prosecutor says.

Hanifi Halis, 21, and brothers Samed Eriklioglu, 26, and Ertunc Eriklioglu, 30, faced Melbourne Magistrates Court on Tuesday afternoon following their arrests earlier in the day during a series of raids across northern Melbourne.

The trio was arrested after a lengthy investigation and 17,000 phone intercepts, 10,500 text messages and more than 7800 hours of recordings from listening devices will form part of the case, a prosecutor told court.

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The men are each charged with one count of preparing or planning for a planning terrorist attack.

A brief of evidence is not expected to be ready for at least four months.

AAP The accused terrorists were all remanded in custody until April, when they are due to face court again. They have never been in custody before and Ertunc Eriklioglu sustained injuries during his arrest. Victoria Police Chief Commissioner Graham Ashton said the trio had been under investigation since March and become "much more energised" in the past week about activating the plot quickly.

"We didn't have a precise time and a precise location," Mr Ashton told reporters in Melbourne of the planned attack.

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"They were looking at a place of mass gathering.

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All three are Australians of Turkish background and had their passports cancelled by federal agencies in January, March and October.

Two of the men have no criminal history while the third was picked up in 2007 for the minor offence of failing to display L plates.

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AFP Assistant Commissioner Ian McCartney said the arrests were an excellent result".

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"If we had not acted early in preventing this attack, we will allege the consequences would have been chilling with the potential, as the commissioner stated, the potential for significant potential loss of human life," he said.

The arrests come as Melbourne prepares to farewell terror attack victim Sisto Malaspina in a state funeral on Tuesday. He was killed and two other men were injured on November 9 when 30-year-old Hassan Khalif Shire Ali drove a burning ute into the city and launched a knife attack.

Police shot Shire Ali who later died in hospital.

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The properties were raided under a joint counter-terrorism operation involving Victorian and Australian Federal Police and ASIO.

A fourth property was raided in Coolaroo.

Authorities say there is no ongoing threat.

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Premier Daniel Andrews said the plot could have been "potentially deadly" had police and agencies not intervened.

"On behalf of all Victorians, I want to thank every member involved, many hundreds of officers who have put themselves in harm's way to keep all of us safe. The seriousness of this potential incident should not be underestimated. We are very grateful, all of us, as Victorians for the work that has been done."