Sydney terror accused Omarjan Azari was allegedly working with Australia's most senior ISIL member and Underbelly actor Mohammad Baryalei to commit acts of terror, police have said.

A curved sword resembling a scimitar, emblazoned with Arabic script, was recovered from a house searched in this morning's police raids.

Mr Azari faced Central Local Court today charged with serious terrorism-related offences.

9NEWS understands Mr Azari is accused of plotting to abduct people off the streets and decapitate them in a manner similar to the recent ISIL beheadings of US and UK citizens in Syria.

Mr Azari allegedly intended to wrap the bodies of victims in ISIL flags and upload video of the murders online.

The video would help fuel the ISIL terror campaign which has led to the formation of an international coalition to eliminate the group.

Mohammad Baryalei is believed to be ISIL's most senior Australian member. (ABC) (ABC)

Court documents showed police have accused Mr Azari of working with Mr Baryalei, Fairfax Media has reported.

Mr Baryalei, 33, is believed by authorities to be a senior ISIL member who recruited at least half of the Australians fighting with the terrorist group in Iraq and Syria.

He was a former bouncer and played a paramedic on Underbelly: The Golden Mile.

Police said raids across Sydney this morning thwarted a plan to commit violence against “a member of the public on the streets”.

Fifteen people were detained after over 800 police officers searched 15 homes and 10 cars in north-western Sydney, in a joint AFP and NSW Police counter-terrorism operation called “Operation Appleby”.

Mr Azari was the first person to be charged following the raids.

Police retrieved a sword from one of the houses searched during this morning's terror raids. (AAP) (AAP)

He did not apply for bail today and will remain in custody until the case returns to court in November.

A second man has since been charged with weapons offences.

Prime Minister Tony Abbott said it's believed an Australian senior ISIL member overseas was ordering networks back in Australia to conduct "demonstration killings".

Videos of the beheadings of US journalists James Foley and Steven Sotloff, as well as UK aid worker David Haines have sparked worldwide condemnation after they were posted online and shared by ISIL supporters.

Police raids this morning were also carried out in suburbs in and around Brisbane but police said they weren’t directly linked to the operation in Sydney.

Police have targeted 15 properties in Sydney's north west. (9NEWS)

In Sydney police executed search warrants in Beecroft, Bellavista, Guildford, Merrylands, Northmead, Wentworthville, Marsfield, Westmead, Castle Hill, Revesby, Bass Hill and Regents Park.

AFP Acting Chief Commissioner Andrew Colvin said the targeted terror cell was planning to commit “random violent acts against members of the public”.

Commissioner Scipione said the raids highlighted the “strength and capability of our counter terrorism forces to stop these attacks from happening”.

“We have in fact disrupted that particular attack,” Commissioner Scipione said.

Timeline of Sydney's early morning terror raids View Gallery

He called for calm after the operation, saying “right now we need to let people know they are safe”.

Yesterday, a Lakemba money transfer business owned by the sister and brother-in-law of convicted Sydney terrorist Khaled Sharrouf was shut down.

Authorities suspected it was sending millions of dollars to the Middle East to finance terrorism.

Police have raided Brisbane properties at Mount Gravatt East, Logan and Underwood. (9NEWS)

The raids in and around Brisbane took place at Logan, Mount Gravatt East and Underwood.

Commissioner Colvin said the operation was following up on an investigation from last week.

Police executed a search warrant at Mount Gravatt East. (9NEWS)

He said they were still working to determine links between the Brisbane and Sydney raids.

Last week, Brisbane man Omar Succarieh, 31, was arrested and charged with terrorism-related offences following a raid at an Islamic bookshop in Logan.

He's accused of fundraising for Syria-based extremist group Jabhat al-Nusra and helping another man, Agim Kruezi, obtain funds to fight for a terror organisation overseas.

Mr Succarieh, who is due to apply for bail in court today, is believed to be the brother of Ahmed Succarieh, who reportedly became Australia's first suicide bomber in Syria last year.

Police have made arrests as part of Operation Appleby. (NSW Police)

Logan man Kruezi, 22, has alleged links to the Islamic State group.

There are about 60 Australians believed to be fighting in Iraq and Syria with groups such as Islamic State, while another 100 are suspected of providing support from Australia.

Mr Abbott lifted the country's terror alert to high last Friday.

Computer and phone records will be forensically examined after terror raids in Sydney and Brisbane. (NSW Police)