Victoria Police says they have foiled a planned terror attack on Melbourne landmarks Federation Square, St. Paul's Cathedral and Flinders Street Station.
Police conducted overnight raids across Melbourne's north-west and have arrested seven people.
During the press conference, Chief Commissioner Graham Ashton said Flinders Street Station, Federation Square and St Paul's Cathedral were the targets.
He said intelligence led police to step-up their investigation and conduct raids on Thursday night.
The attack was planned where the suspects allegedly planned to use "explosive" devices on Christmas Day around the three proposed landmarks.
Police also suspect guns and knives may have been used. Police said the suspects were likely to have been inspired by ISIS.
"If this had gone under guard, this would have been a significant attack," Mr Ashton said.
Police conducted overnight raids at properties in Flemington, Meadow Heights, Dallas and Campbellfield and they said they found evidence of an improvised explosive device.
Seven were arrested and five men are currently in police custody. Four of the five were "self-radicalised" Australian-born men in their 20s of a Lebanese background, the other was an Egyptian-born Australian citizen.
400 officers were involved in the raids and Police said the threat has been "neutralised".
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