Dutton said Benbrika had been notified of the decision and would remain in prison while a court considered whether to keep him jailed.
“He spoke about thousands of Australians being killed,” Dutton told reporters in Brisbane on Wednesday. “It doesn’t matter who it is, if it’s a person that’s posing a significant terror risk to our country, then we will do whatever is possible within Australian law to protect Australians.”
Australia’s first convicted terrorist leader was jailed for a maximum of 15 years in 2009.
The self-proclaimed Islamic cleric has been behind bars since his 2005 arrest over plots to attack Melbourne landmarks, including one to blow up the Melbourne Cricket Ground on grand final day that year.
He also said his group of followers needed to kill at least 1000 non-believers to make the Australian government withdraw troops from Iraq and Afghanistan.
The Commonwealth wants a continuing detention order requiring Benbrika to remain in prison until November 2023, with the matter still before a court.
Dutton said he was the first person onshore to lose his citizenship under the relevant laws, passed in 2007.
Benbrika will be granted an ex-citizen visa under migration law.
Labor’s foreign affairs spokeswoman Penny Wong said the laws allowing the government to cancel citizenship were passed with her party’s support.
“We did understand when we passed those laws through the parliament that the cancellation of citizenship was a big step but a necessary step in certain circumstances,” she told ABC TV. “Mr Benbrika’s activities and his conviction are well known to all of us and that is why Labor supported the passage of that legislation.”