Australia's national terrorism threat level is being lowered from "probable" to "possible", but authorities are warning a deadly attack could still happen here in the next 12 months.
The terror alert level has sat at "probable" since 2014, after the emergence of the violent extremist group Islamic State in the Middle East.
Australian Security and Intelligence Organisation (ASIO) Director-General Mike Burgess announced the move while acknowledging his intelligence organisation was increasingly focused on the rising threat posed by foreign interference and espionage.
"After careful consideration and consultation, ASIO is lowering Australia's national terrorism threat level to possible," Mr Burgess told reporters inside ASIO headquarters in Canberra.
"A decision of this nature is not taken lightly or made casually. The process involves a large number of people and a significant amount of time.
"Their conclusion is relatively straightforward: While Australia remains a potential terrorist target, there are fewer extremists with the intention to conduct an attack onshore than there were when we raised the threat level in 2014."
The ASIO director-general also confirmed the decision to lower the threat level had taken into account the recent repatriation from Syria of Australian women and children linked to the Islamic State group, who were first assessed by ASIO officers.
"I also want to emphasise that a lower threat level does necessarily not mean a lower operational tempo," Mr Burgess said.
"Espionage and foreign interference supplants terrorism as our nation's principle security concern but of course terrorism will remain a priority for my organisation — it's a threat to life and therefore will get the full attention."
Prime Minister Anthony Albanese said he supported ASIO's decision.
"I have absolute confidence in our security agencies … I won't second-guess them and I won't comment on their behalf," Mr Albanese said.
The Coalition has welcomed the development and is taking some credit for ASIO's decision to lower Australia's national terrorism alert level from "probable" to "possible".
Liberal senator and deputy chair of parliament's Intelligence Committee, James Paterson, said ASIO had acknowledged the previous government's work helped reduce the terror threat.
"This is a result of the investments and the powers that the parliament has previously given ASIO, most of which happened over the last nine years under our government but also under prior governments as well," he told the ABC.
"ASIO has the tools and the powers and the resources they need to tackle this threat and there's also some wider structural changes with the fall of ISIL (Islamic State) and other issues."
In 2014, the Abbott government announced that Australia's terrorism threat level would be raised to "probable" following the rapid emergence of the violent extremist Islamic State group in the Middle East.
ASIO said there have been 11 terrorist attacks on Australian soil since 2014 and 21 significant terror plots "detected and disrupted".
