"Today I announce that ... we will be legislating within a few weeks to strip dual citizens involved in terrorism of their Australian citizenship," said Prime Minister Tony Abbott.
Australia raised threat level against the general public to high in September last year and remained so following Sydney hostage crisis in December, 2014.
According to media reports, the announcement came as a Sydney mother in her mid 20s reportedly abandoned her two kids to join Islamic State (ISIS).
More than 100 Australians have joined the radical organisation. At least 30 have been killed.