Attorney General Chris Finlayson says continual engagement with Muslim communities is necessary to prevent extremist groups recruiting through social media.
Mr Finlayson is in Sydney for a two-day summit focussed on tackling the threat of terrorism and use of social media to recruit followers.
He said technology was already used by groups such as Islamic State to influence people and the best approach was to work with people to stop that message having an impact.
The Countering Violent Extremism summit is hosted by the Federal Government and has seen ministers, ambassadors, academics and leaders of civil organisations from 20 countries taking part in workshops.
It aims to "improve regional coordination" and find innovative ways to "reduce the impact of terrorist propaganda", according to a government spokesman.
"The recruitment of particularly young people online is escalating and it's something we are very focused on addressing," Australian Attorney-General George Brandis told the ABC's AM program.
"We have representatives of Google and Twitter and Facebook who will be part in the summit.
"It's a battle [against propaganda and online recruitment] that has to be fought on a daily basis."
Mr Finlayson said a communique has been developed and more summits will be held on how to tackle the problem.