Immigration Minister Scott Morrison said that Aussie jihadists with dual citizenship may soon be stripped of their passports if further study proves the act will not leave them stateless.
The government mulls on the British concept but Mr Morrison said that cancelling dual citizenship is a very extreme measure.
"Cancelling the citizenship of a dual citizen is a very extreme measure. There are existing provisions within the citizenship act that deal with these sorts of things ... and at this stage there are no formal proposals before the parliament," Morrison said as quoted by The Australian.
Cancellation of citizenship among Aussie jihadists was suggested by Independent National Security Legislation Monitor, Bret Walker SC.
"The INSLM is concerned that the concept of dual citizenship raises issues of divided loyalties and does not see why, as a matter of policy, an Australian citizen should also be able to be a citizen of another country," Mr Walker said a report discussed in the parliament.
Meanwhile, two Sydney men admitted in taking orders from ISIL high-ranking personnel and revealed more Australian are now crossing into Iraq from Syria to join the arm conflict in Iraq, Muslim community figure Wissam Haddad told Fairfax media.
"It's not a circus, they are taking orders, they have to ask for permission to do anything. Some Australians are freelancing but most have made their way into Iraq and joined ISIL," Haddad said.
Foreign Minister Julie Bishop had announced on Thursday that she had cancelled passports of Australians travelling to Syria.
Bishop made the cancellations following a report from intelligence agencies that there are already 150 Australians fighting with ISIS in Iraq.
However, Haddad insinuated that cancellation of passports is pointless as those Australians are no longer coming home.
"They're after two things - victory for Islam or martyrdom," Haddad said.
Haddad said that more Australians with dual citizenship are leaving the country to fight in Iraq as an Islamic State is close to fruition.
As the government mulls more sanctions against the Australian jihadists, Community leader Rebecca Kay said that the Muslim community is becoming angrier.
"People are very, very angry at Australia and America. They're angry that the government keeps telling them they're not allowed to go. If Australia gets involved it's going to be a disaster," Kay warns.