A man has been arrested this morning for allegedly plotting a terror attack in Melbourne’s Federation Square on New Year’s Eve.

The 20 year old man from Melbourne suburb Werribee was arrested yesterday afternoon by the Victoria Police Special Operations Group.

Victorian police say the man was on a terror watch list.

They allege he tried — though failed — to obtain a gun to execute a mass shooting.

“We will allege he would use a firearm to shoot and kill as many people as he could in the Federation Square area on New Year’s Eve.”

Click PLAY for full details as well as audio of the Victorian Police Deputy Commissioner

Warrants were also executed at two other houses and a commercial property.

No further arrests are expected.

The man, an Australian citizen with Somalian parents, is being interviewed in relation to the offences of Acts in Preparation to Commit a Terrorist Attack and Collecting Documents to Facilitate a Terrorist Act, contrary to the Commonwealth Criminal Code Act.

“Victoria Police and the Australian Federal Police would like to reassure the community that the threat has been contained and there is no on-going risk posed by this individual,” a Victoria Police station read.