A man who allegedly threatened to kill police in central Sydney last year is now facing terrorism charges.
Police allege Blake Nicolas Pender pulled a 20-centimetre kitchen knife on police officers in Surry Hills in June, before saying the "proudest thing a man can do is behead a cop".
He also allegedly made numerous threats about wanting to become a martyr, police say.
The alleged incident occurred at the intersection of Devonshire and Elizabeth Streets.
Mr Pender was charged at the time with being armed with intent to assault police and steal from persons, and the case remains before the courts.
Following an investigation by the Fixated Persons Investigations Unit, the man has now been charged with terrorism offences, Assistant Commissioner Counter Terrorism and Special Tactics Command Mick Willing said on Wednesday.
Assistant Commissioner Willing confirmed Mr Pender had been "on the radar" of the Fixated Persons Investigations Unit before the alleged incident and was the first person charged by the unit with terrorism offences.
"We gathered further information and evidence which we allege goes towards the intent shown by the individual on that day," he said.
"That information has formed the basis of these charges".
He has been charged with possessing a thing connected with a terrorist act, and doing an act in preparation for or planning a terrorist act.
The man remains in custody, and will face court on the terror charges on February 8.
Assistant Commissioner Willing said the charges highlighted the importance of the Fixated Persons Investigation Unit in stopping those who seek to cause harm.
"The unit identifies and investigates people who may not necessarily profile as a terrorist suspect, but could be capable of carrying out an attack," he said.
"It's a reality that there are people in the community who seek to cause harm to us, and police remain a target.
"NSW Police are doing everything we can to stop the next attack from happening and this unit adds another layer of protection for the community and in many cases, protects individuals from themselves."
Assistant Commissioner Willing said the unit had already conducted 52 investigations and charged 14 people with a range of offences including solicit to murder.
Some of the investigations involved "a fixation" on judges and politicians.
"We are not immune from global events, without a doubt, and police officers and public figures do most certainly pose a target and that is something that we are very mindful of," he said.
"In saying that, the Fixated Persons Investigations Unit is one of a number of strategies we have in place, a number of mechanisms that we have to try and address the terrorism threat.
"Police officers have to be on high alert, we have seen incidents overseas and indeed in Australia where officers and employees of law enforcement agencies have been targeted."
Assistant Commissioner Willing later added: "This is not a new threat at all and we again encourage people to go about their daily lives but be vigilant and be alert and be safe."