Police say more charges are likely after a third man was arrested over the murder in October of NSW police accountant Curtis Cheng.
Mustafa Dirani, 22, appeared in court on Saturday after being detained on Friday afternoon when officers from the Joint Counter Terrorism Team and Middle Eastern Organised Crime Squad stopped his car at Ryde in northwest Sydney.
Dirani, from Marsfield in Sydney's north, was charged with participating in a criminal group and assisting in committing a terrorist act.
Dirani did not apply for bail and it was formally refused at Parramatta Bail Court.
Deputy NSW Police Commissioner Catherine Burn said Dirani has been a person of interest since the shooting.
Ms Burn said it will be alleged that Dirani joined with others to commit a serious violent act leading up to Mr Cheng's death.
"What we will be alleging is that this man joined in with several others to commit a criminal activity, and this activity resulted in the murder of Curtis Cheng," Ms Burn said.
Mr Cheng's family was told of the arrest on Friday night and Ms Burn said they are still taking the shooting "very hard".
"They are numb whenever they hear the news or additional news like this. They are also a very strong family and they are getting through it," she said.
Dirani is due to reappear in court on November 26.
Mr Cheng was gunned down outside NSW police headquarters at Parramatta on October 2.
His killer, 15-year-old schoolboy Farhad Jabar, was shot dead when police returned fire.
An 18-year-old and a 22-year-old have also been charged in relation to the murder.
Ms Burn said more information and evidence about the shooting is coming in.
"We have a lot of electronic evidence to sift through and other material and we will continue to do this meticulously, and as we get the evidence to lay charges we will do that," she said.
Ms Burn said the NSW Police Force is aware the threat against officers is now high.
"We have known since September of last year that our environment has changed ... we are aware that police are potential targets," Ms Burn said.
"We have what we call alert 20-15, we have enhanced training of our police, we ensure awareness at all times. We have made sure our police stations are as safe as they can be, not only for police but also for the public."
