Two brothers and another man have faced a Melbourne court charged with a Commonwealth Crime after allegedly planning an ISIS-inspired terror attack.

During early morning raids today, police swooped on Ertunc Eriklioglu, 30, in Dallas, while his brother Samed, 26, was arrested in Campbellfield. The third suspect, 21-year-old Hanifi Halis, was apprehended following a raid at a Greenvale home.

It is alleged the men had recently made moves to access a high-powered rifle, and had been communicating on an encrypted messaging app similar to WhatsApp.

Ertunc Eriklioglu, 30, outside the Melbourne Magistrates' Court this afternoon. The Dallas man is the brother of second suspect, Samed Erikloiglu. (9NEWS)

First look: The 21-year-old Greenvale man, Hanifi Halis, charged with one count of preparing a terror attack. (Nine)

Samed Erikloiglu is taken away by police to the Melbourne Magistrates' Court. (Nine)

Authorities said a specific location for the plot was not finalised but the men allegedly wanted to kill "as many people as possible" in a crowded place.

Qurans, mobile phones and computers were all seized from the suspects’ homes during the raids.

All have since been charged with one count of preparing a terrorist act and appeared in the Melbourne Magistrates' Court this afternoon.

Police separated and flanked all three suspects in different cars as they arrived.

The three suspects in the dock at the Melbourne Magistrates' Court today. (9news)

Each of the men were remanded in custody until next April.

The father of the Erikilioglu brothers, Armagan, earlier told 9News his sons “don’t like Islamic State” and denied allegations they were planning an attack.

“There’s no way…not Australia, no.

“They are very polite, they're not wild, they're not aggressive.

“They listen to the scholars like me, scholars and all that… but no, not Islamic State.”

He's just arrived at Melbourne Magistrates' Court to face the charge. (Nine)

The suspect is taken away by police to court. (Nine)

Victoria Police Chief Commissioner Graham Ashton said the trio had been under investigation since March and the investigation was carried out by more than 200 officers.

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

"They were looking at a place of mass gathering.

"There was a view towards a crowded place, a place where maximum people would be attending, to be able, to kill, we allege, as a maximum amount of people as possible.

Police said they swooped on the men after they allegedly made significant moves to carry out the alleged plot. (Nine)

(9NEWS)

"I believe, over more recent days, attempts have been made to source a 0.22 semi-automatic rifle to assist with the carrying out of that terrorism event."

"The consequences would have been chilling," Counter Terrorism Command Ross Guenther told reporters this morning.

"There was potential for significant loss of human life."

All three suspects are Australian nationals of Turkish background and all had their passport cancelled by federal agencies earlier this year, 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.

It is understood Ertunc Eriklioglu had become increasingly isolated in recent years, praying at home instead of attending a local mosque, a neighbour told the media.

Police block the Dallas home where a man had been arrested over an alleged terror plot. (Nine)

Evidence was taken from the home where a 30-year-old man had been arrested. (Nine)

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."

Three men have been arrested. (Nine)

The arrests come as Melbourne said goodbye terror attack victim Sisto Malaspina in a state funeral . 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.