An 18-year-old arrested for allegedly plotting a terrorist attack in Sydney left a high school last year after being investigated for allegedly preaching extremism in the playground.

Tamim Khaja was arrested at his Macquarie Park home on Tuesday morning by counter-terrorism police.

It will be alleged that Mr Khaja had attempted to leave the country three times to join Islamic State in the past three years.

Most recently, he was stopped at Sydney Airport in February trying to fly to Syria but his passport was cancelled.

The 18-year-old then allegedly began planning an attack on home soil — trying to acquire a gun and scouting sites in Sydney — when he was arrested.

It's alleged Mr Khaja is close with imprisoned extremist Milad bin Ahmad-Shah al-Ahmadzai and his brother, Maywand Osman, who is also in custody on terrorism offences.

However, Fairfax Media understands Mr Khaja's family, who are Australian citizens of Afghan heritage, are only moderately religious.

One of Mr Khaja's older brothers is a commercial pilot, another is a salesman whose public social media posts are more about international football and the Royal Easter Show than religion.

Mr Khaja left Epping Boys High School last year following allegations he was trying to influence his classmates to adopt his extremist views. He was in Year 12 at the time.

The incident prompted the NSW government to conduct a state-wide audit of student prayer groups in schools.

The audit of lunchtime prayer groups exposed failings by some schools to follow departmental guidelines requiring them to seek parental permission.

The audit also appeared to be backfiring in some schools with students being encouraged to conduct their own unregulated playground prayer groups to avoid the new level of government scrutiny.

Some parents and students expressed their support for Mr Khaja at the time, saying he was a "blessing" to younger Muslim students.

"[My son] has been going to these Friday lessons weekly and has never come home with anything like what is being suggested," one parent wrote on Facebook.

"This young man has been a blessing to the younger boys, they are very upset to hear such things about him."

One parent said an issue between Mr Khaja and another boy at the school had led the boy to make false accusations against Mr Khaja.

On Tuesday, a friend of Mr Khaja, Fatima Abdelrahim, said he was a "beautiful" boy who came from a good family.

"His family are very clean, very intelligent, I've never seen them in trouble with the cops," she said.

Police were still combing the family's Macquarie Park home on Tuesday.

Mr Khaja was expected to be charged late on Tuesday afternoon and appear in Parramatta Local Court on Wednesday.

His lawyer, Osman Samin, indicated he would not make an application for bail at this stage.

He said the family were "shattered".