He did not seek bail and it was formally refused.
Court documents allege Khan engaged in a terrorist act in an attempt to murder Wayne Greehalg with the "intent to influence the Australian Government".
Mr Greenhalg was stabbed while walking through a reserve on Saturday afternoon, suffering injuries to his body and hands.
He was treated by paramedics and flown by helicopter to Liverpool Hospital in a critical condition. His condition has since improved to "serious".
Police say that when an officer arrived at the scene on Saturday Khan tried to stab the officer before being arrested.
Police allege the attack was "planned" and "deliberate" despite the victim and Khan being unknown to one another.
"This was clearly a very volatile a very violent situation that police and the members of the community were confronted with," Deputy Commissioner Catherine Burn told reporters on Sunday.
The accused allegedly shouted words at the scene, which led police to believe he was inspired by ISIS.
"We know that this person has strong religious beliefs inspired by ISIS. What made him act yesterday we don't know," she said.
"It was deliberate and it was violent."
Khan's court case has been adjourned to Wednesday at Sydney's Central Court.
