Federal police have arrested a 21-year-old Sydney man they allege was an Islamic State (IS) recruiter who tried to radicalise teenagers into carrying out politically motivated violence.

Key points: The AFP said the man was using social media to indoctrinate teenagers who were between 17 and 18 years old

The AFP said the man was using social media to indoctrinate teenagers who were between 17 and 18 years old It admitted it had used digital surveillance powers to circumvent the suspect's encryption protocols

It admitted it had used digital surveillance powers to circumvent the suspect's encryption protocols It said the man had downloaded documents about how to use knives and blunt objects during terror attacks

The Australian Federal Police (AFP) said the Riverwood man is expected to be charged with several terrorism offences, which carried a potential life sentence if he was to be found guilty.

AFP Assistant Commissioner Ian McCartney said the Australian-born man was connected to other individuals who have been charged with terrorism offences, but would not disclose who they were.

He said the man "created and posted increasingly extremist material on social media, including supporting martyrdom".

The AFP said the man also downloaded a "document on basic weapons and tactics", which included how to use knives and other blunt instruments during a terrorist attack.

AFP Assistant Commissioner Ian McCartney said there was no imminent threat or attacks planned. ( ABC News )

"It will be further alleged he actively attempted to influence teenagers to adopt and act upon his extremist views," Assistant Commissioner McCartney said.

"It was fair to say there was a continuum of radicalisation … to the point of encouraging politically-motivated violence."

Police said the man was using several different social media platforms to indoctrinate young people between 17 and 18 years old.

While police have warrants to search two properties in Sydney's south-west, the Assistant Commissioner said there was no attack, imminent threat or further arrests planned.

The arrest of the Sydney man comes days after two people were killed during a knife attack on London Bridge.

While the terror incident in the UK was concerning to AFP investigators, particularly around how intense media coverage could influence other extremists, the arrest was not connected.

"We decided to act early because we needed to, we were concerned … our number one priority was the safety of the people in NSW," the Assistant Commissioner said.

The AFP admitted it had taken advantage of digital surveillance powers granted to it by the Federal Government in this case.

"We were able to use this legislation in terms of getting behind the veil of encryption and that was a key aspect leading to this action today," Assistant Commissioner McCartney said.

He did not elaborate on this point further.