It's not known whether the 19-year-old was killed in battle or by extremists after trying to return to his Melbourne home.
Only months after leaving Lyndale Secondary College, Irfaan Hussein was allegedly making his way to the Middle East to join IS.
Terrorism experts say if true, such a swift transformation from popular schoolboy to jihadist highlights the dramatic impact of IS recruiting via social media.
"In the past, radicalisation was very bricks and mortar. Now people are radicalised without having actually met the people encouraging them to get involved in attacks."
"In the past, radicalisation was very much based on knowing the right people. You had to go to a house of worship, a community centre. It was very bricks and mortar," said Dr David Malet from Melbourne University.
"Now people are radicalised without having actually met the people encouraging them to get involved in attacks."
The teenager's name also surfaced during last month's counter-terrorism operation that thwarted an alleged Anzac Day plot.
Police have alleged they found his phone number in the house of Harun Causevic, the 18-year-old arrested in the raids.
"We know that the death cult is trying to brainwash people online."
Irfaaan Hussein was also a close friend of Numan Haider, the 18-year-old shot and killed after stabbing two police officers in Melbourne's south-east last year.
"We know that the death cult is trying to brainwash people online," said Prime Minister Tony Abbott.
Both attended Lyndale Secondary in the nearby suburb of North Dandenong.
In a statement, the school defended its students, saying they made a positive contribution to the community through volunteering and charity work, while embodying the quintessentially Australian values of diversity, tolerance and respect.
While staff work tirelessly to provide pathways and options for students, "what they do once they leave our school is something we have no control over".
"If we don't let people back under any circumstances we can't use them as the best assets for counter-radicalisation."
Professor David Malet says the best way for authorities to sell the anti-radicalisation message is to enlist those who have returned.
"It's a problem I think with Australia's policies on foreign fighters right now is [that] if we don't let people back under any circumstances we can't use them as the best assets for counter-radicalisation."
The Prime Minister has defended the hard-line stance on returning fighters.
"You will be jailed because there is no place in society for people who have been radicalised and brutalised," he said.
According to the Attorney-General, at 30 thirty Australians have been confirmed killed, fighting for IS.
