Neil Prakash is one of the most high-profile Australian members of ISIS. He was arrested when crossing from Syria into Turkey on October 2016.
Federal Police said the 31-year-old had served “a period of detention for terrorism” in Turkey and was scheduled to appear in court on Friday “where an application will be made to extradite him to Victoria”.
“He will be charged by the Victorian counter-terrorism team”, a statement added.
Police said an investigation into the suspect began in 2016 when he allegedly travelled to Syria to fight with ISIS.
Prakash is also known as Abu Khaled Al Cambodi, and was designated in 2017 as a terrorist by the US Treasury Department. He was born in 1991 and had a Victoria driver's licence, which indicates he is from the Australian state, public records show.
He featured heavily in ISIS propaganda videos.
Prakash was falsely reported to have been killed in 2016. Australian authorities believe he was involved in domestic terrorism, but Prakash previously denied these allegations in a Turkish court.
Authorities have estimated about 230 Australians travelled to Iraq and Syria to take up arms since 2012.
Agencies contributed to this report