The device, which is thought to be historical, was found in Beil Drive, Yoker, Glasgow, at around 10.45am on Thursday.
Police said it was found by a worker who then contacted emergency services.
A cordon was erected around the road and a number of properties were evacuated as a precaution while Army bomb disposal experts and the fire service were called in.
A police spokeswoman said: “Police and emergency services were called to Beil Drive, Yoker, following the discovery by a worker of an explosive device, possibly a small grenade.
“Beil Drive has been shut from Halley Street to Felton Place and a cordon has been established in the area as a precaution.
“There has also been a partial evacuation of local residents. Specialist services have been contacted and inquiries are continuing.”