Adam Brookman, 39, arrived at Sydney International Airport on Friday night and was arrested over his alleged involvement in the Syria conflict.
The Australian Federal Police says he is due to appear in Parramatta Local Court on Saturday morning where counter terrorism police will seek his extradition to Victoria.
Mr Brookman voluntarily surrendered himself to Turkish officials earlier this week.
Australian authorities helped organise his travel back to the country, the AFP said in a statement.
Mr Brookman has claimed in an interview with Fairfax Media that he did humanitarian work in Syria and was forced to join IS after being injured and sent to IS-controlled territory.
The father of five could face serious charges if he travelled to no-go zones in Syria.
However, experts say he could be shown leniency if he provides important information.
Foreign Minister Julie Bishop said Mr Brookman was not an exception to Australian laws that make it a crime to travel to declared parts of Syria and Iraq without a valid reason.
"Mr Brookman is obviously a person of interest to our law enforcement and intelligence agencies," she said on Friday.
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