The operation, involving NSW police, the Australian Federal Police and ASIO targeting various Sydney suburbs, resulted in 15 arrests and one person being charged with serious terrorism-related offences.
That man was Omarjan Azari, 22, who today appeared in a Sydney court charged with conspiracy to prepare for a terrorist attack on Australian soil.
It's believed the allegations involve a plot to kidnap and behead on camera random members of the community in Sydney and Brisbane.
Another 70 police conducted similar raids in Brisbane.
Federal Police acting commissioner, Andrew Colvin, says Operation Appleby was the largest of its type in Australia's history.
It involved forensic experts, specialist tactical officers and surveillance officers as well as investigators, executing 25 search warrants.
Commissioner Colvin said the investigation, which began earlier this year, is still ongoing.
He says police believe the group targeted in the raids had the intention and had started planning to commit violent acts in Australia.
"These violent acts particularly related to random acts against members of the public," he said.
NSW Police Commissioner Andrew Scipione said the operation reflects the reality of the threat we're actually facing, but more importantly the strength and capability of our counter-terrorism forces to stop these attacks from happening.
"It's of serious concern that right at the heart of our communities we have people that are planning to conduct random attacks," he said.
"We have in fact disrupted that particular attack."
He said now is a time for calm, and the plans have been "thwarted".
The Commissioner also announced that Operation Hammerhead, involving more than 220 police, would put officers in highly visible patrols to prevent any retribution over the raids and deal with "trouble-makers".
"We won't be tolerating any misbehaviour on the streets," he said.
Dr John Bruni, security analyst and terrorism expert with Sage International, says vigilance against any threat is high with the approaching G20 and Anzac commemoration.
"Both of these particular events are huge security events," he says.
The security analyst says Australia's increased terror alert has allowed police, intelligence agencies and the military to work closely together to identify threats.
"Arab and Muslim communities across Australia are under enormous pressure," Dr Bruni says.
He claims members of those communities have been phoning in anonymous tips to police, because of their concern over how badly extremist views reflect on them.
Dr Bruni says the Federal Government's decision to send troops to the Middle East means we won't be able to let down our guard any time soon.
"I think that if it wasn't for having deployed forces to the Middle East, we could probably have relaxed everything after the G20, but it doesn't look like we're going to be able to relax this time round, not for the forseeable future."
Dr John Bruni spoke to Jill Emberson on 1233 ABC Newcastle Mornings.
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