The brother of the killer who stabbed cafe owner Sisto Malaspina on Melbourne's Bourke Street has admitted to trying to buy a gun to prepare for a terrorist attack.

Key points: Ali Khalif Shire Ali was due to face a jury trial before his guilty plea and will return to court in August

Ali Khalif Shire Ali was due to face a jury trial before his guilty plea and will return to court in August The court heard the attack was designed to "advance the cause of Islam through violence"

The court heard the attack was designed to "advance the cause of Islam through violence" He is the brother of Hassan Khalif Shire Ali, who was shot dead in last year's Bourke St attack

Ali Khalif Shire Ali, 22, on Wednesday appeared in the Supreme Court to plead guilty to making inquiries about gaining access to a firearm and ammunition in preparation for or planning a terrorist attack.

The court heard the attack was planned to take place in Federation Square in late 2017 to "advance the cause of Islam through violence".

Ali was arrested at his home in Werribee during a series of raids by ASIO and other agencies in November 2017.

His case was due to go to trial in front of a jury until he pleaded guilty on Wednesday.

A plea hearing will be held in August.

Suppression orders have previously prevented reporting that Ali was the brother of Hassan Khalif Shire Ali, who was shot dead by police when he drove his car into Bourke St and set fire to gas cylinders before attacking Mr Malaspina.

Hassan Khalif Shire Ali killed 74-year-old Mr Malaspina, who was well known in Melbourne as a co-owner of the iconic Pellegrini's Espresso Bar, and injured others in the Bourke St attack in November last year.

The Bourke St attack in November last year left one man dead and others hurt. ( ABC News )

Person of interest

At the time of Ali Khalif Shire Ali's arrest, police said they believed he was trying to get an automatic rifle to "shoot and kill as many people as he could" around Federation Square, in Melbourne's CBD during New Year's Eve celebrations.

Federation Square is one of the most popular spots in Melbourne to bring in the new year.

He had been monitored by police, who said at the time that they made the arrest because he had been having face-to-face meetings about getting a gun.

The court was told Ali Khalif Shire Ali wanted to advance the cause of Islam through violence. ( ABC News )

But police stressed at the time that the man, who was described as being a "high person of interest", never actually managed to obtain a gun.

Victoria Police Deputy Commissioner Shane Patton said at the time of the arrest, the result of the plot could have been catastrophic.

"This is a person who's expressed an intention to try and kill as many people as he could through shooting them in the Federation Square area on New Year's Eve. Horrendous," he said.

"If this attack were to have gone ahead, it would have been absolutely catastrophic, but the point is it was stopped."

Police also said at the time that Ali Khalif Shire Ali had accessed documents produced by Al Qaeda, including a "guidebook" on how to commit a terrorist act and how to use firearms.