A federal public servant from western Sydney has been charged after allegedly giving Islamic State more than $30,000.

Members of the Joint Counter-Terrorism Team (JCTT) arrested the 40-year-old woman at Guildford about 7:30am on Tuesday and took her to Parramatta Police Station.

The woman, who is an Australian citizen, was charged with five counts of making funds available or receiving funds from a terrorist organisation.

New South Wales Police Assistant Commissioner Michael Willing said there was no danger to the community.

"We'll be alleging that between February 2015 and October 2015, the woman electronically transferred money to fund a proscribed terrorist organisation, being Islamic State," he said.

He said police would allege the woman used Western Union to transfer the money.

The arrest is part of an ongoing investigation — named Operation PEQIN — into several people alleged to be involved in terrorist activities.

The woman speaks to officers during her arrest. ( Supplied: NSW Police )

The JCTT is a collaboration between NSW Police and Australian Federal Police, the Australian Security Intelligence Organisation (ASIO) and the NSW Crime Commission.

Prime Minister Malcolm Turnbull said he had been "well briefed" on the arrest.

"This is another example of the excellent work of our Joint Counter Terrorism Teams between the earn Federal Police, ASIO and the New South Wales Police in this case," he said.

"We work very, very closely together. Good intelligence and good cooperation enables terrorist plots and activities to be disrupted."

The woman is expected to appear at Parramatta Local Court this afternoon