The Federal Government says it is trying to confirm reports that Australian Islamic State terrorist Mohammad Ali Baryalei has been killed while fighting in the Middle East.

Baryalei had been accused of masterminding a plot to kill random members of the public in Sydney and Brisbane, and had recruited dozens of Australians to fight with extremist groups in Iraq and Syria.

Reports of his death have been circulating on social media, and the ABC has been told he died four or five days ago.

Foreign Minister Julie Bishop said the Government was trying to confirm the reports.

But authorities say they have no evidence confirming Baryalei's death, and have expressed caution.

Facebook post by Yassin Ali regards the death of Mohamed Ali, October 2014. ( Facebook )

The 33-year-old from Sydney was the catalyst for last month's unprecedented counter-terrorism raids, when more than 800 police raided homes in Sydney and Brisbane and charged four people.

Authorities allegedly intercepted a phone call from Baryalei ordering Sydney man Omarjan Azari to kidnap and kill a member of the public on camera.

Police said the executions were just days from being carried out in Sydney and Brisbane in the style of the Islamic State beheadings of Western hostages James Foley, Steven Sotloff and David Haines in Syria.

Baryalei was said to hold a trusted position in Islamic State's operational command and to have facilitated the recruitment of at least half of the 60 Australians currently fighting in the Middle East.

From Afghan refugee to Islamic State facilitator

Last month the 7.30 program revealed that Baryalei had been a drug-user and brothel tout who mixed with underworld figures in Sydney's King Cross.

Baryalei was from an aristocratic and moderate Sufi Muslim family in Kabul, Afghanistan. His grandfather was a poet, who was scribe and second cousin to the last king of Afghanistan, Zahir Shah.

The family fled the war-torn country in 1981, two years after the Russian invasion, when Baryalei was just 40 days old.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 5 minutes 32 seconds 5 m Islamic State's most senior Australian fighter may have been killed.

After the September 11 terrorist attacks, Baryalei's family said that he felt unwelcome in Australia and abandoned his first name, Mohammad, to be known as Ali Baryalei.

A counter-terrorism expert said she expected Islamic State to use Baryalei's death as a recruitment tool.

"The way that the narrative of ISIS works is that those that die in battle are immediately called martyrs," Curtin University's Anne Aly said.

"We've already seen that with reports on Facebook... he's already been called a martyr.

"His story, somebody who was into drugs, and into the hard life, who then became a born-again Muslim if you like, rose up the ranks of ISIS and then died as a martyr. This will be used by ISIS to recruit more people."