The AFP said they arrested and charged the man from Point Clare, on NSW's Central Coast, yesterday with 'hacking.'
LulzSec has claimed responsibility in the past for several high profile attacks, including the compromise of user accounts from Sony Pictures in 2011.
The group also claimed responsibility for taking the CIA website offline
The 24-year-old self-proclaimed leader works in IT and police said "he held a position of trust with access to sensitive information from clients including government agencies."
Commander Glen McEwen, Manager of Cyber Crime Operations, said the message was a warning to hackers everywhere.
"Yesterday evening the AFP arrested and charged a self-proclaimed Australian leader of the internationally-renowned computer hacking collective known as Lulzsec," Mr McEwen told reporters in Sydney on Wednesday.
"It will be alleged that this person known by the online identity ozshock had gained unauthorised access and caused data impairment to a government website during this month."
The man was bailed to appear in Woy Woy Local Court on May 15.
Meanwhile other hackers have wreaked havoc with Wall Street, hacking the Associated Press Twitter account to tweet "Breaking: Two explosions in the White House and Barrack Obama is injured”.