Police were keeping people away from the small boat basin in Portugal Cove-St. Philip's on Tuesday morning, after the discovery of what appears to be a grenade.
A navy dive team has been called in to retrieve the object, which was initially described as military ordnance.
Officers with the Royal Newfoundland Constabulary have blocked off the area, although police said there is no immediate concern for public safety.
The object was spotted in the water around 6:10 p.m. on Monday.
The RNC's explosives disposal unit was not able to get access to the grenade because it is under water.
A specialized dive team is being sent from Halifax and may be on the scene Tuesday.