Razak said Malaysia condemns what he called Daesh's blatant misrepresentation of Islamic teachings, when it says the sadistic brutality, torture and murder of innocent men, women and children were justified.
He made Malaysia's stand at the Leaders' Summit on Countering Islamic State (Daesh) and Violent Extremism at the United Nations in New York.
"Renounce your virulent creed of hate, violence and extremism and be guided back towards the righteous path, or face the consequences," he was quoted as saying by The Star Online.
The Summit was hosted by U.S. President Barack Obama and Vice-President Joe Biden.
As the chair of the Southeast Asian nations grouping ASEAN this year, Razak said Malaysia is leading the region towards combating all forms of extremism, including the possible spreading of Daesh beliefs in the region.
"We must make pre-emptive arrests if necessary and if there is irrefutable evidence, to save innocent lives," Razak said, referring to over 100 people detained in recent months by the Malaysian police, all suspected of having inclination towards Daesh.
He underlined that Malaysia's law enforcement and security agencies have been working quietly to combat the menace.
Collaboration with international law enforcement agencies has been strengthened, especially in intelligence gathering.
Razak said Malaysia was aware of Daesh's fast-spreading influence in cyberspace, thus proposed that ASEAN countries' government must come up with an organised strategy to counter the lies being spread by the IS online supposedly in the name of Islam.
Malaysia is also exploring the potential of establishing a regional digital counter-messaging communications centre to combat Daesh efforts.