A 16-year-old boy charged with planning a terrorist act was allegedly trying to obtain a gun for an Anzac Day plot in Sydney, court papers say.

Key points: 16-year-old from Auburn in Sydney charged with preparing for, or planning, act of terrorism

16-year-old from Auburn in Sydney charged with preparing for, or planning, act of terrorism Police will allege the plot was linked to Anzac Day commemorations

Police will allege the plot was linked to Anzac Day commemorations NSW Premier said people should not be deterred from attending Anzac Day events

New South Wales Police increased the level of security at today's Anzac Day services after charging the teenager.

He was arrested yesterday near his home in Auburn in Sydney's west, after an investigation by officers attached to Operation Vianden.

He was taken to Auburn police station, where he was charged with one count of preparing for, or planning, an act of terrorism.

The matter was heard in the Children's Court on Monday morning, and the teen did not apply for bail.

Speaking outside court, the boy's lawyer, Zemarai Khatiz, said the case would be defended and a bail application would be lodged on Tuesday.

Papers tendered to the court showed the teenager was allegedly trying to obtain a gun to carry out an Anzac Day terror plot — an offence that carries a maximum penalty of life imprisonment.

Anzac Day should be observed 'free from fear': Police

Sorry, this video has expired Police took swift action on eve of Anzac Day to foil terror plot, Scipione says

NSW Police Commissioner Andrew Scipione said anti-terrorist officers were forced to act yesterday afternoon in order to ensure public safety.

"Clearly we have taken swift action to ensure community safety on the eve of a sacred day on the Australian calendar," Commissioner Scipione said.

When asked, he said police believed an Anzac Day event could have been the target.

"Clearly we'll be suggesting that there was a proposed attack to happen on this day," Commissioner Scipione said.

Police said the individual was known to them, but they believed he was acting alone.

Commissioner Scipione said event security had been increased for the day.

"Our level of security at Anzac Day is always high, we have increased it," he said.

Sorry, this video has expired NSW Premier labels alleged Anzac terror plot 'disturbing'

"It is a noticeable increase, but you must remember at the moment Australia is dealing with a threat. Certainly in terms of the level of the alert that is out there, we are 'probable'.

"The attack didn't happen, so that's a good thing," he said.

"What we have had is an intervention to stop an attack. That being the case, our level of security at Anzac Day is always high."

He said the age of the teenager was of particular note.

"The age of the individual is obviously a concern for us, and it remains a measure of the ongoing task facing law enforcement and the community.

Law enforcement has the tools it needs: Justice Minister

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Federal Justice Minister Michael Keenan said the news that a 16-year-old had been arrested was a "chilling and disturbing scenario".

Speaking from Perth, he said Australian security agencies had thwarted six terror attacks on Australian soil in the past 18 months.

"We have invested $1.3 billion in our police, Australian Crime Commission, intelligence committee and other agencies that work to keep us safe from terrorism," he said.

"The arrest that they made overnight is actually a good example that they have the capability and the tools that they need to do that, and again I acknowledge the efforts of particularly the agency that I'm responsible for, the Australian Federal Police," he said.

Minister Keenan added that there was no indication that more arrests would be made in relation to the case.

He joined NSW Premier Mike Baird in calling for people not to be deterred from attending Anzac Day events.

"This is a day where we should be out, commemorating such a proud day of our history," Mr Baird said.

"Where we come and commemorate those many lives that have been lost defending this nation, defending our freedoms, and that is exactly what we should be doing today."