A woman has been arrested in western Sydney for her alleged involvement in the financing of the terrorist organization Islamic State, local police said Tuesday.

The 40-year-old woman from Guildford in Sydney's west was taken into custody by a joint counter-terrorism team on Tuesday morning and taken to Parramatta police station, a statement said.

She has been charged with five counts of intentionally making funds available to, or collecting funds for, Islamic State, knowing that the organization was a terrorist group. The charge carries a maximum 25-year jail term.

Police said that between February and October 2015 the woman allegedly transferred money to fund the group. She has been refused bail and will appear in a local court later in the day.

The arrest is the result of an ongoing investigation, started in June 2015, to investigate the activities of several people believed to be involved in terrorist activities, police said.

In 2016, a Sydney schoolgirl was arrested under the same operation over allegations she helped raise money for Islamic State.

Prime Minister Malcolm Turnbull praised the ‘excellent’ work of the police, and intelligence and counter terrorism officials on Tuesday.

‘Good intelligence and good cooperation enables terrorist plots and activities to be disrupted,’ he told reporters in Brisbane.

‘I can't add to what has been in the public domain, other than to say there is no ongoing threat to the public.’  

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