Ihsas Khan was charged with committing a terrorist attack following the random stabbing in Minto, in Sydney's south-west, just after 4pm on Saturday.

Neighbours saw Mr Khan waiting in a reserve on Ohlfsen Road for as long as 10 minutes before local man Wayne Greenhalg, 59, came through the park on his daily walk. 

Mr Greenhalg was then allegedly stabbed several times with a large knife, suffering near-fatal wounds to his hands and body.

He managed to scramble away to the nearby home of Duyen Phan, who runs a salon out of her garage.

A local resident Sharon, who didn't want her surname published, watched as Ms Phan barricaded herself and Mr Greenhalg inside the salon while Mr Khan allegedly tried to smash a glass door.

He was yelling "someone is going to die today," she said.

Other witnesses who had tried to intervene in the reserve said Mr Khan was yelling "Allah Akbar" as he slashed Mr Greenhalg.

Deputy Commissioner Catherine Burn said it's possible that Mr Khan attacked the stranger in an attempt to lure police and attack them.

When officers tried to arrest him outside the home in Ohlfsen Road, he allegedly attempted to stab an officer through the window using a large knife.

Dramatic photos obtained by Fairfax Media show the moment three officers used Tasers to subdue him before bundling him into a van.

Ms Burn said investigators have found information to suggest Mr Khan had planned to commit an attack on Saturday that was inspired by the so-called Islamic State.

"We know that this person has strong extremist beliefs inspired by ISIS. What made him actually act yesterday we don't know," she said on Sunday.

"There was clearly some planning yesterday that we do know about and that only came to light post the incident."

"This clearly was a very volatile, very violent situation that police and the members of the community were confronted with."

Mr Greenhalg was well-known around the neighbourhood and was often seen out walking his dog.

"Everybody knew Wayne. He would say hello to anyone," said one local resident. "He'd never hurt a fly but I'm sure would fight till death to protect anyone."

He was taken by ambulance helicopter to Liverpool Hospital in a critical condition on Saturday. His condition improved to serious on Sunday.

Police believe Mr Khan, who also lives in Ohlfsen Road, didn't know his victim but Ms Burn said he had "formed some views" about him in the immediate lead-up to the attack.

​The 22-year-old has a criminal conviction for property-related offences and had come to the attention of local police recently for "odd" behaviour that suggested he may hold extremist beliefs, Ms Burn said.

She said he was not connected to any local or international terror groups but he's "clearly dealing with some issues".

Police have seized a large knife as well as computers, phones and other items to be examined for extremist material or any other indicators of a motive.

Mr Khan chose not to appear in Parramatta Bail Court on Sunday and he was refused bail.

"Police would like to reassure the community there is no ongoing threat in relation to this incident," a statement said.

A man has been charged with committing a terrorist attack and attempted murder after a man was stabbed in Sydney's west on Saturday.

Emergency services were called to a home in Ohlfsen Road in Minto at 4pm after a 57-year-old man was stabbed several times while walking through a park.

He suffered serious injuries to his body and hands and managed to run to the nearby home for help.

He was taken by ambulance helicopter to Liverpool Hospital where he remained in a critical condition on Sunday morning.

A short time later on Saturday afternoon, a 22-year-old man was arrested nearby in Macquarie Fields. 

When police approached him, he allegedly tried to stab an officer through a window.

He was taken to Macquarie Fields police station where the Joint Counter Terrorism Team charged him with committing a terrorist attack and attempted murder.

A large knife was seized for forensic examination.

Police believe the attack was random and the two men don't know each other.

The 22-year-old will appear in Parramatta Bail Court on Sunday.

"Police would like to reassure the community there is no ongoing threat in relation to this incident," a statement said.

NSW Police Force Deputy Commissioner Catherine Burn will hold a press conference at 9.30am to explain the details surrounding the man's arrest. 

The Joint Counter Terrorism Team comprises the NSW Police Force and the Australian Federal Police.