Police suspect the 18-year-old man shot dead outside the Endeavour Hills police station planned to behead officers and post the images online.

Numan Haider used a small knife to attack an Australian Federal Police officer and a Victorian policeman before he was shot dead with a single shot.

When Haider was searched he was found to be carrying a larger knife and an Islamic State flag.

Police believe the plan was to follow instructions from the international terror group Islamic State and behead the officers, cover the bodies in the flag and then take photos to post via the internet.

He had been the subject of police investigations for the past three months as he had became increasingly radical.

Schoolfriends said he showed no signs of violent behaviour in secondary college.

Police say he was part of a small group of Islamic Melbourne men who have been sharing violent hate messages.

His passport was cancelled as police became concerned although they chose to meet him outside a police station to avoid inflaming an overreaction.

"No-one was aware what was in his mind," a senior policeman said.

Meanwhile, the head of an Islamic group linked to Mr Haider would not confirm whether he had been involved with the controversial centre.

Harun Mehicevic, also known as Abu Talha, spoke to Fairfax Media near the Al-Furqan Islamic Centre in Springvale South, the epicentre of a large counter-terrorism operation in 2012.

Mr Mehicevic declined to comment about Mr Haider, or the Endeavour Hills incident, saying the group may release a media statement later on Wednesday. It has been reported that Mr Haider spent time with the group.

In 2012, it appeared Al-Furqan members were suspected of involvement in extremist activity, including fundraising for rebel forces in Syria.

It is unclear whether Mr Mehicevic has been caught up in recent wide-ranging cancellations of passports by authorities, given he was in his native Bosnia when the raids occurred in 2012 and was allowed to return freely to Australia.

With Nino Bucci