"Victoria Police would like to reassure the community that the threat has been contained and there is no on-going threat," the spokesman said. "Victoria has well tested, cooperative, counter terrorism and emergency management plans in place and constantly monitor and assess our preparedness to respond to a range of emergencies."

A short while ago, (8.37 pm AEDT; 9.37 am GMT), the police confirmed that four of the six men have been charged with "Acts in Preparation Contrary to 101.6 of the Criminal Code" -- which makes it an offence to carry out "any act in preparation for, or planning, a terrorist act".

Three of the four -- Abdullah Chaarani, aged 26; Hamza Abbas, aged 21; and Ahmed Mohamad, aged 24 -- have already appeared in court and have been remanded in custody until April. The fourth -- a 22-year-old, will appear in court tomorrow.

"Overnight our police and security agencies have disrupted a very substantial terrorist plot," the Australian Prime Minister Malcolm Turnbull told journalists. "What they have uncovered is a plot to explode improvised explosive devices in central Melbourne in the area of Federation Square, on or about Christmas Day.

"This is one of the most substantial terrorist plots that has been disrupted over the last several years. I want to thank the men and women of the police in Victoria, the Australian Federal Police and ASIO and other agencies, for their work in thwarting this terrorist activity which was an Islamist terrorist plot inspired . . . by Daesh.

"It has been a very complex investigation and it speaks volumes for the competence and professionalism of our police and security agencies which are the best in the world."

Federation Square in Melbourne is dominated by the Flinders Street railway station and St Paul's Anglican Cathedral. The cathedral was featured in a video released last month by Daesh, to encourage its supporters to target it.

"Certainly these are self-radicalised, we believe, but inspired by [Daesh] and [Daesh] propaganda," Victoria Police chief commissioner Graham Ashton told journalists, speaking about the four suspects. He said that police had been watching the group for some time and believed that they were preparing a "multi-mode attack" that would have been "significant".

He said: "A substantial number of people could have been injured in the attack, from what we've seen -- certainly potential for quite a number of people to be injured or killed in this attack."

Commissioner Ashton confirmed that police executing the warrants had "gathered the makings of an improvised explosive device."

Services at St Paul's Cathedral will continue as planned. The Archbishop of Melbourne, Australian Primate Philip Freier, thanked police and security officers for their work.

"I thank God that the message of hope, peace and reconciliation which is God's message in Christ will be proclaimed clearly and publicly at St Paul's as well as all of our parish churches and authorised Anglican congregations," Dr Freier said.

"This disrupted terror plan should alert us all to making proper preparations for welcoming the many thousands of people -- regular, occasional and no-church goers alike -- to our Christmas worship. If you have any concerns about your security arrangements you should talk to your local police."

The Dean of Melbourne, Dr Andreas Loewe, said that Anglicans were "grateful and relieved" that the terror plot had been foiled. "We will be alert, but not afraid," he said has he thanked the security services "for their excellent work."

Security has been stepped up at a large number of Anglican and other Christian cathedrals and churches around the world in light of recent terrorist attacks, including at Canterbury Cathedral, the mother-church of the Anglican Communion.

Police in the UK are not routinely armed, but in September Kent Police -- the police force that covers Canterbury -- publicly announced that they were stepping up patrols by specialist armed officers around the cathedral. "We continue to regularly review the threat levels in the county in consultation with the Home Office to ensure we provide the most appropriate protection for the people of Kent deputy chief constable Paul Brandon said.

"While we are not expecting a direct threat to the county, we do want to make sure that should circumstances change quickly, we are adequately prepared . . . and we want the public to know what we're doing to protect them and not to panic if they see officers with firearms or Tasers on patrol."