Australian Federal Police (AFP) have arrested, at the request of the FBI, a director of a Melbourne business college believed to be linked to the LTTE over alleged terrorism offences in the US.

Thulasitharan Santhirarajah, 34, is expected to face extradition proceedings after his arrest on Monday when AFP agents raided homes and businesses around Melbourne, including the office of his Melbourne International College, The Australian reported.

The raids were conducted at the request of the FBI, which has been cracking down on the fundraising activities in the US of members of the LTTE.

A spokesman for federal Attorney-General Robert McClelland confirmed the US had requested that Santhirarajah be detained.

"The man is wanted to face prosecution for alleged terrorism offences in the United States of America," the spokesman said. "As this is an ongoing law enforcement matter, it would be inappropriate to comment on the specifics of the case."

Santhirarajah appeared briefly in Melbourne Magistrates court on Monday and was remanded in custody until next month.

As well as the city office of the college, AFP agents raided five properties and businesses in Narre Warren, Dandenong and Lysterfield.

Two Melbourne men, allegedly linked to the LTTE, are awaiting trial over unrelated alleged terrorism-related offences. They were charged in 2006 with being members of a terrorist organisation, making funds available to a terrorist organisation and making an asset available to a proscribed entity.