An Australian teenager arrested during a police raid at his home has pleaded guilty to preparing a terrorist act.

Officers seized bomb-making materials and a computer during the raid in Greenvale, north Melbourne, in May.

Court documents revealed the computer contained encrypted documents called Make a Bomb in the Kitchen of Your Mom and Pressure Cooker Backpack Bomb with Switch Detonator, the ABC reported.

The 17-year-old, who cannot be identified because of his age, also allegedly viewed Islamic State propaganda on the computer.

The boy was due to face a committal hearing in a Children's Court on Monday.

But ahead of the hearing he admitted a single charge of engaging in an act in preparation for, or planning, a terrorist act.

Two other charges were dropped by prosecutors following the guilty plea.

The teenager looked down and when asked in the courtroom how he wished to plead, he quietly said: "Guilty."

He did not apply for bail and was remanded in custody and will appear in County Court later in the week.

Australia, which is part of the US-led coalition against IS, has been on heightened alert for attacks by homegrown radicals.