A 17-year-old boy has been charged with terrorism offences following a raid by state and federal police at a home in Melbourne's north, thwarting what police described as "an imminent threat to the community".

Heavily-armed officers from Victoria Police and the Australian Federal Police swarmed a home on Friday afternoon.

The teen was charged on Friday afternoon with engaging in an act in preparation for, or planning, a terrorist act.

Police said the alleged attack was to target a location in Australia.

They said it will be alleged the teenager was undertaking preparations for an act of terrorism, as well as possessing things that relate to the commission of a terrorism act.

"Victoria Police have been working with the Australian Federal Police and other security agencies dealing with an imminent threat to the community of Victoria," Acting Deputy Commissioner Robert Hill from Victoria Police said.

Sorry, this video has expired Teen charged with terrorism offences after Melbourne raids

"This matter has been subject to an intense investigation, especially over the last nine days.

"The investigation has been methodical. Our resolution phase has been precise and measured.

"On Thursday afternoon, an agreement was reached that we would resolve this matter with direct action."

Deputy Commissioner Hill said the teenager was arrested as he was leaving the house.

"The facts are this: as a male was leaving that address in a motor car with a female he was intercepted by our specialist police.

"The 17-year-old male was taken into custody. The female was secured.

"We then cordon-contained the address and we asked the three other occupants in the house to come forward in which they did."

He is expected to appear in court on Monday.

Raids 'saved lives in Victoria', according to AFP

Police said there were no links to last month's terror raids in Melbourne's south-east, which saw two teenagers being charged with planning an alleged attack.

AFP Deputy Commissioner Mike Phelan said it was unclear when the teen planned to carry out the alleged plot, or if he was acting alone.

He said the original tip to police came from a report made to the national security hotline.

"There's a lot of speculation about what's been planned around this particular investigation, but national security investigations by their very nature are complex and dynamic," he said.

"At this point in time we've got to examine [a] lot of material that was seized at the premises, sift through a lot of intelligence.

"We have to get the full picture, so we may not know exactly where it was going to occur nor when it was exactly going to occur.

"But let me tell you, something was going to happen.

"As a result of Victoria Police and AFP interception yesterday, some Victorians are going to be alive because of it.

"Had we not intervened, there was a real threat of action being taken."

No longer an imminent threat: Police

Uniformed and plain-clothed officers from Victoria Police and the AFP took part in the raid on Friday afternoon. ( AAP: Tracey Nearmy )

Deputy Commissioner Phelan said the bomb squad then discovered improvised explosive devices at the home.

"During the search warrant at the premises, three suspicious items were located and also material that was associated with the making of explosive devices," he said.

"The three items were subsequently taken to a nearby park and rendered safe by the Victoria Police bomb squad.

"These are extremely serious offences and they did involve the use of improvised explosive devices."

Balaclava-clad officers with assault rifles stood guard around the property, while heavily armoured vehicles blocked off the street on Friday.

"We want to assure the community of Victoria that we have contained the situation," Deputy Commissioner Hill said.

"There is no longer an imminent threat to the community of Victoria.

"People should be assured that Victoria Police, working closely with the Australian Federal Police and other agencies, are doing their very best to keep Victorians safe and that's what we've done thus far."

Victorian Premier Daniel Andrews thanked police for their professionalism and "outstanding work" during the operation.

"Be in no doubt, this was a serious operation ... [it] has kept Victorians safe," Mr Andrews said.

Family 'distraught' at son's arrest

Officers search the garage of the teenager's home in Greenvale. ( AAP: Tracey Nearmy )

Deputy Commissioner Hill said the boy's family was "distraught" at his arrest.

"We have dealt with his family and his family are a caring, loving family that are now very, very distraught as a consequence of what is alleged," he said.

"It has undoubtedly taken them by surprise.

"This is a challenge for law enforcement agencies not only in Victoria, around Australia, but across the Western world.

"We have a new challenge where we have young people that have been influenced by radical thinking, something we're dealing with as a law enforcement body with Government, but more importantly with community."

Deputy Commissioner Phelan said the wider community needed to address the radicalisation of young people.

"We've got to do something about this problem. All of us. All in the community. It's got nothing to do with faith," he said.

"This is about all the community, all families getting together, having a greater understanding of what your children are doing."