The young pair, Sameh Bayda and Alo-Bridget Namoa, both now 21, were charged last year with the offences, which prosecutors said they had plotted in late 2015 to early 2016.
Prosecutors told the NSW Supreme Court Bayda had given Namoa the knife and said each believed they had a "religious obligation to attack non-believers", Sydney's Daily Telegraph reported Friday.
They had already been in custody accused of collecting documents likely to facilitate terrorist acts.
Bayda was allegedly found with Arabic documents on how to carry out a stabbing and how to make an improvised explosive device (IED), media reports said.
Namoa allegedly was in possession of an Islamic flag and hunting knife, as well as instructions in Arabic on making a IED detonator, the reports added.
She reportedly wrote in a text message conversation with Bayda that they were the "Islamic Bonnie and Clyde".
The pair are due to return to court in December for their sentencing hearing.
Authorities say more than a dozen terrorist attacks have been prevented in the past few years, but several have taken place, including a cafe siege in Sydney in 2014 where two hostages were killed.
COMMENTS (1)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ