SYDNEY: Australian Islamic State figher Khaled Sharrouf has become the country's first dual nationality individual to be stripped of Australian citizenship under anti-terrorism laws, the Australian newspaper said on Saturday.

Australia, a staunch ally of the United States and its battle against Islamic militants in Iraq and Syria, is on alert for attacks by radicalised Muslims, including home-grown militants returning from fighting in the Middle East.

Under a 2015 law, Australia may strip dual nationals of their citizenship if they are found to have carried out militant acts or been members of a banned organisation.

Sharrouf, the son of Lebanese immigrants, shot to infamy in 2014 after photographs emerged of him and his 7-year-old son holding the severed heads of Syrian soldiers, causing a global outcry.

A spokesman for Australia's Immigration Department told Reuters an individual had been stripped of citizenship, but declined to provide further details.