Two men tried to smuggle an improvised explosive device on to a plane at an Australian airport last month in a plot directed by Islamic State, police have said.

The men, who are now facing terrorism charges, targeted an Etihad Airways flight out of Sydney airport, Australian Federal Police Deputy Commissioner Michael Phelan told reporters.

One of the men, a 49-year-old from Sydney, brought the device to the airport on July 15 in a piece of luggage that he had asked his brother to take with him on the flight – but he had not told his brother the bag contained explosives.

But for reasons still unclear, the bag never got past the check-in counter. Instead, Mr Phelan said, the 49-year-old man left the airport with the bag, and his brother continued on to the flight without it.

“This is one of the most sophisticated plots that has ever been attempted on Australian soil,” Mr Phelan said.

“If it hadn’t been for the great work of our intelligence agencies and law enforcement over a very quick period of time, then we could well have a catastrophic event in this country.”

The details he provided on Friday are the first that officials have released since four men were arrested in a series of raids in Sydney last weekend.

Khaled Khayat, 49, and Mahmoud Khayat, 32, have been charged with two counts of planning a terrorist act. A third man remains in custody, while a fourth was released without charge.

Khaled Khayat’s brother has not been charged in connection with the plot, because police believe he had no idea the bag contained explosives, Mr Phelan said.

Lawyer Michael Coroneos appeared on behalf of Khaled and Mahmoud Khayat at a brief court hearing on Friday. They were refused bail and the case was adjourned until November 14. Police have not detailed the men’s relationship.

Australian Federal Police Deputy Commissioner Michael Phelan (Rick Rycroft/AP)Australian Federal Police Deputy Commissioner Michael Phelan (Rick Rycroft/AP)

The components for the device, including what Mr Phelan described as a “military-grade explosive,” were sent by a senior Islamic State member to the men in Sydney via air cargo from Turkey.

An Islamic State commander then instructed the two men who have been charged on how to assemble the device, which police have since recovered, Mr Phelan said.

After the July 15 bid failed, the men changed tactics and were in the early stages of devising a chemical dispersion device, which they hoped could release highly toxic hydrogen sulphide, he said.

Ethiad says it is working with Australian police in its investigation (Kamran Jebreili/AP)Etihad says it is working with Australian police in its investigation (Kamran Jebreili/AP)

“Hydrogen sulphide is very difficult to make, so I want to make it quite clear that while it may be a hypothetical plot, we were a long way from having a functional device,” Mr Phelan said.

Police had no idea either of the plans were in the works until they received a tip-off through intelligence agencies on July 26, Mr Phelan said. They arrested the men on July 29.

The allegation that Islamic State was able to ship explosives to Australia undetected was troubling, police admitted.

One of the men charged was put in touch with the Islamic State commander police believe directed the plot in April, Mr Phelan said. He declined to release the Islamic State commander’s name.