Police have moved to reassure Melburnians there is no specific terrorism threat to the city after a "person of interest" in Pakistan named Melbourne locations as potential bombing targets.

Queen Victoria Market, Federation Square, St Paul's Cathedral, the William Street law precinct and the Chadstone shopping centre were all identified as potential locations, police confirmed.

Victoria Police Assistant Commission Ross Guenther said the man discussed the locations with someone in the UK, who was pretending they were in Melbourne.

But the threat was investigated by police abroad, who were satisfied there was no direct threat to Melbourne.

Assistant Commissioner Ross Guenther said Victorians should not be concerned. ( AAP: James Ross )

"I would stress that people should not be unnecessarily concerned," Mr Guenther said.

He said a man called Sajed, who claimed to be part of a network of terrorists, sent instructions about potential attacks in Melbourne.

"The person in Pakistan is known to us as being an ISIS supporter and quite a serious threat."

But Sajed's messages were received by people in the UK posing as jihadists, who passed them on to authorities.

"The information was ultimately shared with our law enforcement security partners who assessed that information and concluded that it posed no credible threat," Mr Guenther said.

"I want to be really clear that these matters are not taken lightly by Victoria Police.

"People should be reassured. The fact is that such instructional material is not uncommon.

"We know that terror groups have been providing similar instructions for attacks across cities across the west for several years now.

"This is not a Victorian issue, it's not even an Australian issue. It's a threat to all major western cities."

Police said there was no credible threat against the market ( ABC News: Danielle Bonica )

Premier Daniel Andrews said he had confidence in Victoria's counter terrorism unit to keep the public safe.

"The advice I have from Victoria Police is there was not, and there is not, a credible threat," he said.

Dozens of people monitored in Victoria

Mr Guenther said authorities were monitoring about 200 people of interest in Victoria.

He said communication often came in the form of online propaganda magazines published by al Qaeda and the Islamic State group, and on social media networks — some of which are encrypted.

But he said the public should not be alarmed.

"We've been very successful in disrupting plots here in Victoria," he said.

Police have recently foiled several alleged terror plots in Victoria, which are currently before the courts.

Mr Guenther said authorities had assessed about 2,500 calls made in Victoria to the national security hotline last year.

A $32 million threat assessment centre to thwart would-be terrorists was opened in Melbourne earlier this year.