Four people were arrested in Australia on Wednesday over the terror-linked murder of a police employee after coordinated raids by more than 200 officers on properties across Sydney.

Those seized in the dawn operation were aged between 16 and 22 and face questioning over Friday's killing of Curtis Cheng outside New South Wales state police headquarters in the city's west.

Farhad Jabar, 15, who authorities said was born in Iran of Iraqi and Kurdish background and had no previous criminal history, shot the 58-year-old in the back of the head while reportedly shouting religious slogans.

The teenager was gunned down in an exchange of fire with police special constables soon after.

Reports said the homes of three of the men arrested on Wednesday were previously targeted in Australia's biggest counter-terrorism raids a year ago.

New South Wales Deputy Commissioner Catherine Burn confirmed some of those detained were known to police but declined to elaborate on their connection to Jabar.

"Time will clearly tell about what their associations may have been leading up to the events on Friday," she said, adding that Jabar had not been on their radar.

"We have a great deal of information that we have to actually go through. Whether or not they inspired it, I don't know at this particular point in time."

Asked if police were working under the assumption that the teenager did not act alone, she replied: "We definitely have our suspicion he did not act alone."

On Tuesday, a student who attended the same school as Jabar was arrested and charged over alleged posts on social media threatening police, with his home searched and two laptops seized.

He was also charged with assaulting and intimidating police and resisting arrest when he was stopped on his way to Arthur Phillip High School, close to where the shooting took place.

The 17-year-old, who has not been named, was given strict conditional bail and will face a children's court on November 9.

Earlier police said that five suspects had been arrested, but later changed the number to four.



'Horrendous act of violence'

Investigators have yet to establish why Cheng, a police accountant, was targeted, although Prime Minister Malcolm Turnbull has said the attack "appears to have been an act of terrorism".

Burn confirmed it was being treated as such.

"It's difficult because we don't really know the motivation of the 15-year-old," she said.

"However, what we are investigating is a terrorism offence.

"So what we would suggest and we suspect is that there was some influence, whether it was ideologically, religious or politically motivated, that determined and influenced the 15-year-old to go and commit this horrendous act of violence."

Authorities on Sunday searched a mosque Jabar is believed to have attended with police saying some of those arrested Wednesday also used the facility.

Canberra is concerned about the prospect of lone-wolf attacks by individuals inspired by groups such as Islamic State, and has cracked down on Australians attempting to travel to conflict zones including Syria and Iraq.

The country lifted its terror threat alert to high a year ago, introduced new national security laws and has conducted several counter-terrorism raids to address the concerns.

In September 2014, Melbourne police shot dead a "known terror suspect" who stabbed two officers, just one day after IS militants called for Muslims to indiscriminately kill Australians.

And in December, Iranian-born self-styled cleric Man Haron Monis and two hostages were killed following a 17-hour siege at a central Sydney cafe.

Justice Minister Michael Keenan said the government was working hard to stop young people becoming influenced by radical extremism.

"We are working to try and divert people if we think they are falling under the spell of ISIL in the Middle East," he told the Australian Broadcasting Corporation Wednesday, using another name for IS.