Sevdet Besim, 19, had faced a maximum sentence of life in prison after pleaded guilty in Victoria state's Supreme Court in June to one count of planning for a terrorist act.
Today, the court instead ordered Besim to serve a 10-year prison term, with the possibility of parole after seven-and- -half years.
Prosecutors said Besim was involved in a plot to attack last year's services in Melbourne or the neighbouring city of Dandenong marking ANZAC Day, the annual commemoration of the 1915 Gallipoli landings in Turkey.
Police said Besim was motivated by an extremist ideology and had expressed support for the Islamic State group. In court documents, prosecutors said that Besim and a British accomplice had also discussed packing a kangaroo with explosives and painting it with the Islamic State symbol before setting it loose on Australian police officers.
The documents don't suggest the alleged kangaroo plot was linked to the ANZAC Day plot.