The slick video, uploaded to YouTube, shows a man who identifies himself as Abu Yusuf explaining that he travelled to the city of Raqa in Syria to use his medical skills to help the IS cause.
Australian media widely reported that he was Tareq Kamleh, an Adelaide-trained doctor.
"I saw this as part of my jihad for Islam to help the Muslims in the area that I could, which is in the medical field," he said in the video, in a broad Australian accent.
More than 100 Australians are believed to be fighting with jihadists in Iraq and Syria and Foreign Minister Julie Bishop said a medical professional joining them was a worrying development.
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"This is a deep concern," she told ABC radio.
"This is clearly another vile attempt by Daesh to try to entice Australians and others to put themselves at risk.
"Joining Daesh doesn't help the people of Syria and Iraq, it helps the terrorist organisation that's on a murderous rampage killing Muslims and non-Muslim people in their way," she added.
Daesh is another name for Islamic State.
"So while I can't comment on the circumstances of the individual, and you'll appreciate why, we will continue to point out that this is a murderous terrorist organisation. It is unlawful for Australians to be involved in any way," she said.
Without naming Kamleh, Immigration Minister Peter Dutton told reporters a 29-year-old Australian male departed Adelaide on March 10.
"The report... In relation to an Australian doctor going to serve ISIL in Syria is deeply disturbing," he said.
"For an Australian doctor to go -- to sign up with this group of bandits, people who are murdering, raping, killing people in the Middle East in the name of ISIL -- is something that our country can't tolerate."
Australia raised its threat level to "high" last September and has since carried out a series of counter-terrorism raids, most recently this month when two men were charged with planning an attack.
Alarm has been fuelled by the departure of dozens of Australians to fight in Iraq and Syria.