Sydney man Ihsas Khan has been charged with attempted murder and committing a terrorist act after he allegedly stabbed a 59-year-old man walking through a park on Saturday afternoon.
"We know that this person has strong extremist beliefs inspired by ISIS," NSW police deputy commissioner Cath Burn said on Sunday.
"This is the new face of terrorism... this is the challenge we face."
A large knife was seized and the victim underwent surgery. His condition has been downgraded from critical to "serious".
According to police, officers arrived at Minto and the 22-year-old tried to stab one of them through a window before he was "subdued" and arrested.
BREAKING: A police operation is currently underway on Ohlfsen Road in Minto. More on 7 News at 6pm. #7News
"There was clearly some degree of planning and preparation just before the incident happened."
Burn confirmed Khan was "known to police" but did not have any documented links to terrorist organisations.
"Our counter-terrorism investigation squad and other police have been conducting investigations overnight and that has culminated in the 22-year-old man being charged with committing an act of terror and with an attempt of murder charge," she said.