One man has been arrested in an Australian Federal Police counter-terror operation in the NSW town of Young.

AFP Commissioner Andrew Colvin said the man will be charged with a number of offences, including two "serious" foreign incursion offences, on Tuesday. He is due to appear in court in Young on Tuesday afternoon.

It is alleged the man, a 42-year-old Australian-born electrician, attempted to research and design a laser warning device and missiles for Islamic State.

"He'll be charged with a number of offences which include two serious foreign incursion offences under the Commonwealth Criminal Code, which carry a maximum penalty of life imprisonment," Mr Colvin said.

"With these offences, we will allege that he has utilised the internet to perform services for ISIL, activities in the Syria and Iraq conflict, from Australia in the following ways.

"Firstly, by researching and designing a laser warning device to help warn against incoming guided munitions used by coalition forces in Syria and Iraq. And secondly, we will also allege that he has been researching, designing and modelling systems to assist ISIL's efforts to develop their own long-range guided missile capabilities."

Mr Colvin said the alleged advice provided by the "technically-trained" man was "fairly sophisticated and well-planned".

"We will be alleging that the material that he was intending to provide to ISIL, the research he was doing, was credible," he said.

Dozens of officers descended on a semi-rural property in Cherry Vale Place early on Tuesday morning and executed search warrants before the man was arrested.

The search was part of the long-running Operation Marsburg, an investigation by the AFP's Canberra-based counter terrorism team.

Some officers were seen to use metal detectors to search the ground, while a NSW Police officer from the dog squad stood nearby.

Mr Colvin said it is believed the man acted alone. No further arrests are expected.

Prime Minister Malcolm Turnbull said the arrest highlighted a need for Australians to remain vigilant.

"This highlights that terrorism, support for terrorist groups, and Islamist extremism is not limited to our major cities," he told a briefing at Parliament House in Canberra.

"This is yet another example of the excellent work the men and women of the Australian Federal Police and all our security agencies are doing in identifying and disrupting alleged assistance to ISIL."

Justice Minister Michael Keenan said Tuesday's raid, carried out by NSW Police in conjunction with the AFP, came after a year and a half of investigation.

"The arrest today is the result of an 18-month-long operation and it reminds us that whether you are in a capital city planning an attack on home soil or whether you are in a small country town, trying to assist the terrorist state in the Middle East, you will get caught," he said.