The Government will strengthen Part IIIAAA of the Defence Act to remove some constraints in the provisions to "call out" the ADF to assist states and territories.
"In the current threat environment, it is most likely that a terrorist attack will use simple methodologies - a knife, a gun, a vehicle and the attack itself could be over in minutes", Mr Turnbull said.
The Australian prime minister says Canberra is set to extend the powers of the military to take action in response to potential terrorist attacks in the country.
The new measures would mean the Australian Defence Force (ADF) could be called in sooner to help police deal with threats.
It was the first major review of Defence's contribution to domestic counter-terrorism in more than a decade.
"State and territory police forces remain the best first response to terrorist incidents, immediately after an attack starts", The Guarding quoted Turnbull as saying in a joint statement with the defence minister, Marise Payne.
The changes will include the removal of the provision that now limits states and territories from asking for ADF support and specialist military skills until their capability or capacity has been exceeded.
"We have to ensure that every resource we have - legislative, military, police, intelligence, security - is always at the highest standard and able to be brought to bear to keep Australians safe", he told reporters in Sydney.More news: Woman's body found in buck's party hotel room
Immigration Minister Peter Dutton could be given a greater role in coordinating counter-terrorism policy among changes to national security which include military intervention in terror incidents.
The Government will also make changes to the Act to make it easier for Defence to support the police response, such as the ability to prevent suspected terrorists from leaving the scene of an incident.
State and federal governments are working together on recommendations from the coroner's report.
The PM announced a plan to increase cooperation and shared training between State and Territory police and the Australian Defence Forces (ADF), and make it easier for the ADF to be deployed domestically during a terrorist attack.
The system also only allows the ADF to be deployed if the governor-general signs off on a request from the prime minister, attorney-general and defence minister, who all have to agree state forces are incapable of properly responding.
Asked whether the government had used the ADF as props at the announcement given the striking imagery of the commandos, Mr Marles said he had not seen the images of the press conference but added that "there is a fine line between acknowledging and indeed celebrating the incredible work that our defence force personnel do on the one hand and politicising them on the other".
Constitutionally, states are responsible crime prevention.