The Army Bomb squad has safely disposed of a grenade sucked out of a stormwhater drain by contractors in the Dunedin suburb of Mosgiel.
Part of Murray St was cordoned off for about five-and-a-half hours on Tuesday until the bomb squad arrived from Christchurch.
Police told residents to keep to the rear of their properties.
Senior Sergeant Craig Brown says the grenade had live explosive inside it, but no detonator.
He told Checkpoint it had the potential to explode.
The grenade is believed to be from World War II.
[audio:http://www.radionz.co.nz/audio/national/ckpt/2009/11/03/unexploded_grenade_sucked_from_mosgiel_drain ]Listen to Senior Sergeant Craig Brown on Checkpoint