The extremist group Terrorgram, which was listed as a terror organisation on Friday, was linked to a plot to kill NSW Labor MP Tim Crakanthorp in 2024.
Home Affairs Minister Tony Burke said the plot was one of the reasons for the group's formal listing as a terrorist organisation.
Australians who join, recruit or fund the network will face prison sentences of up to 25 years.
Mr Burke said he was concerned about the potential for attacks against elected officials in the UK and US happening in Australia.
"I don't want Australia to become a country where members of parliament can't move around freely and engage with the community. It's good for democracy," he told Sky News on Sunday.
"Terrorgram has been shown to be a threat on our shores ... but (there was) as very direct attempted attack on an Australian member of parliament."
The federal government says Terrorgram provides instructions to its members online through the chat platform Telegram how to conduct terrorist attacks, and has been responsible for inspiring events in the United States, Europe and Asia.
The US branded Terrorgram a terrorist organisation in January.
Mr Burke said while Terrorgram operated differently to other terrorist organisations, the group needed to be dealt with harshly.
"What they're doing on that group is not just spreading a whole lot of racist forms of bigotry and other forms of bigotry. They then also share how-to guides on how to conduct a terrorist attack, encouraging people to do so," he said.
"The fact that it's a different form of terrorism doesn't change one bit ... we need to act on it as seriously as we would if it were a group of people meeting in a room in a terrorist cell."
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