The item, found on a pavement on the opposite side of the road to the Annandale Street mosque, was reported to police at about 11.50am this morning.
One eye-witnesses at the scene say that neighbouring homes have been evacuated and that a funeral has been postponed at the Mosque.
They have also described seeing a large police presence of about 8 to 10 cars, and a police cordon has been put up.
Bomb disposal experts carried out an initial examination of the package with a remote robot - which then prompted police to extend the safety cordon, closing off all of the surrounding roads.
The Explosive Ordnance Disposal (EOD) team carried out a controlled explosion at around 2.50pm. It is not yet know if the object was a viable explosive device.
After the explosion, members of the bomb disposal team, wearing black protective clothing, were seen scouring the area around the robotic vehicle with torches.
Eyewitness David Laird, a 30 year old business owner from East Pilton who works in the area, said: “The police just kept moving everyone back so it seems fairly serious. They evacuated all the homes really quickly and then pushed the cordon back again.
“Then they sent in the robot for a second time and just after that there was a noise like a gunshot, so they have detonated somnething. The bomb disposal guys have been geting their safety gear on and are going in to examine it, and the cordon is still up.”
Another eyewitness who was attending the funeral of a close family friend at the mosque said: “The police basically turned up and immediately told everyon they had to get out. There were about 200 people there for the funeral.”
A spokesperson said: “Police in Edinburgh were called to Annandale Street around 11.50am on Friday 1st March following a report of a suspicious item. A cordon was established as precaution while the EOD carried out an assessment of this. The item was found not to pose any risk to the public and the community are thanked for their co-operation. Enquiries continue to establish the full circumstances surrounding this item and anyone with concerns can speak to a local officer or contact Police Scotland on 101.”
The street was reopened at about 4.30pm.
Join our Facebook group Our Edinburgh to share images and news from and around the Capital