The 42-year-old electrician was working alone and there was no domestic-related terror threat, Australian Federal Police Commissioner Andrew Colvin said.
‘We will allege he has utilised the internet to perform services for ISIL,’ Colvin said, using an acronym for the jihadist group.
‘Firstly, by researching and designing a laser warning device to help warn against incoming guiding munitions used by coalition forces in Syria and Iraq.
‘Secondly, we will also allege that he has been researching, designing and modelling systems to assist ISIL's efforts to develop their own long-range guided missile capabilities.’
The man, from Young, a town about 165 kilometres (102 miles) from the Australian capital of Canberra, is expected to appear in court later Tuesday on foreign incursion charges that carry sentences of life imprisonment.
Prime Minister Malcolm Turnbull said the incident was ‘yet another reminder of the enduring threat we face from Islamist terrorism’.
‘They want to divide us, they want us to turn on each other -- we will not let them succeed,’ he said.
Canberra has become increasingly worried about homegrown extremism and the terror threat level was raised in September 2014.