Mohamed Bakit, a 65-year-old retiree living in Carlton, appeared in Melbourne Magistrates Court on Wednesday afternoon after being charged by federal police.
The accused propagandist for the extremist group is accused of sending about 10,000 documents, messages, images, videos and audio files relating to executions and torture.
Police allege the Somali-born Australian citizen pledged allegiance to the Islamic State of Iraq and Syria between 2018 and 2020.
He is alleged to have acted on behalf of the terrorist group without travelling to the territory it controlled during conflict in the Middle East.
His role was significant, police said.
The scale of extremist material Bakit was accused of spreading put him among the top propagandists on the encrypted messaging platform he used, acting federal police assistant commissioner Paula Hudson said.
"The material allegedly shared by this man glorified acts of extreme violence and promoted a terrorist organisation, spreading a hateful ideology that's designed to radicalise others," she said.
The videos, photographs, audio files and documents he allegedly sent contained messages relating to "abhorrent content", including executions, mass murder and torture allegedly captured on battlefields.
"Terrorist organisations like ISIS rely on online platforms to distribute propaganda and recruit supporters," Ms Hudson said.
"Their content is specifically designed to radicalise individuals, encouraging them to adopt extremist beliefs and commit acts of violence."
Bakit was arrested at a home in Carlton, in Melbourne's inner north, on Wednesday morning.
Counter-terror officers will also allege he shared information about avoiding detection from law enforcement, along with instructional guides on planning and conducting mass-casualty attacks.
Police have not ruled out further arrests but have not linked Bakit's activities with any terrorist attack or plot, saying he is no longer a danger to the community.
He was charged with being a member of a terrorist organisation, possessing violent extremist material and using a carriage service to cause offence.
How Bakit came to be radicalised was expected to emerge in court, Ms Hudson added.
But no details were aired during Bakit's brief appearance on Wednesday.
Instead, his lawyer Stephanie McLennan indicated it was her client's first time in custody and he required medication for diabetes, a heart condition and blood pressure issues.
Bakit was remanded in custody and is expected to apply for bail on Thursday.
The arrest followed an investigation that began with a referral from customs officials who intercepted Bakit and searched his luggage at Melbourne Airport in November 2020 as he left for Egypt.
A search of his mobile phone allegedly turned up suspicious content.
Agents seized the device but allowed the man to travel on to Egypt, where he stayed for six months.
Investigators believe Bakit had compassionate grounds to leave the country, as was required during COVID-19 travel restrictions in place at the time.
There is no evidence he journeyed to any declared no-go zones.
A further search warrant was executed in 2024.
Police do not allege Bakit continued to distribute extremist material after his initial interception in 2020 and say he did not travel again after his initial voyage to Egypt.
Authorities believe more than 200 Australians have joined Islamic State since 2012, some of the more than 50,000 fighters the group was thought to have attracted from overseas.
Having taken control of an area about the size of Great Britain across Syria and Iraq at its peak in 2014, IS has since been splintered by foreign adversaries into pockets in Nigeria, Mozambique and Mali.
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