Sydney (AFP) - Australia's parliament has passed legislation to strip dual nationals of their citizenship if they are convicted of terrorism offences or found to have fought with banned groups overseas, despite concerns about deporting jihadists.

Attorney-General George Brandis said the Australian Citizenship Amendment (Allegiance to Australia) Bill, passed late Thursday, updated existing law to reflect "the new age of terrorism".

"The legislation will strip Australian citizenship from dual citizens who are involved in terrorist conduct overseas or convicted of a terrorism offence in Australia," he said Friday.

"It will also ensure terrorists who are dual nationals are prevented from returning to Australia and dual nationals who engage in terrorism within Australia can be removed where possible."

Brandis said the changes were necessary given the current threat around the world and in Australia -- where the risk of a terror attack is deemed by officials to be "probable".

Canberra has been increasingly concerned about the flow of fighters to Iraq and Syria to join extremist groups such as Islamic State, with some 110 Australians currently fighting in the region. As many as 45 have died in the conflict.

The Attorney-General said the new laws, which will not render individuals stateless, will apply in "very limited circumstances".

They cover people who engage in terrorist acts, including training, recruitment and finance, and are convicted of a terrorist offence and sentenced to at least six years in jail.

Those who fight for a declared terrorist group also automatically lose their citizenship.

"Dual nationals who engage in terrorism are betraying their allegiance to this country and do not deserve to be Australian citizens," Brandis said.

The legislation, which has opposition Labor Party backing, raised concerns in the Senate about the possibility of those deported committing further acts once overseas.

But Brandis told the chamber that such people would be placed "into the hands of the government of the other nation of which they are dual citizens".

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"It will be for that government to deal with them and to take whatever action, according to its domestic law, it seems appropriate to take," he said.

Civil libertarians have also criticised the law as not only unnecessary, but for creating "two tiers of citizenship" -- those who can have their Australian citizenship revoked because they are dual nationals and those who cannot.

"It is a fundamental error to expressly legislate for two classes of Australian citizenship," the Joint Councils for Civil Liberties said in a letter last month.

"It emboldens the rhetoric of extremists who would assert that there are 'true' Australians and then there are 'others'. It will support those who want to divide us rather than to unite us."

Stephen Blanks, president of the New South Wales Council for Civil Liberties, said Australia would be breaching its international obligations if it sent people back to countries where they faced torture.

"It's not going to have any real impact on solving the problem," he told AFP on Friday.