The joint operation with Scotland Yard forced Waterloo Bridge, Westminster Bridge and Victoria Embankment in central London to shut and reopened only early this morning.
"Victoria Embankment has now reopened after police and the Royal Navy worked together to remove a suspected WWII ordnance. Police were called to the River Thames in Victoria Embankment to reports of a suspected WWII ordnance. Specialist officers attended and assessed the device," a Scotland Yard spokesperson said.
The Port of London Authority said the suspected bomb measured "2ft by 1ft" (60cm x 30cm).
The device has been referred to as an "ordnance", which in armed forces terms can refer to either explosive weapons or ammunition.
The unexploded device is now being assessed by specialists.
It was spotted by a dredger watching materials being pulled from the riverbed.
"We're opposite the [London] Eye and about 100 yards from New Scotland Yard. Part of my work is to keep an eye on the items coming out and all day long there's these bucketfuls of muck coming out. I suddenly looked down at the barge and saw the bomb," the man was quoted as saying by 'Plymouth Herald'.
Last night cops said roads in the area were closed, including the northbound lanes of Waterloo Bridge and all of Westminster Bridge, near the Houses of Parliament.
Nearby Westminster Underground station was also shut - causing chaos for workers trying to get home.
London was heavily bombed by Nazi Germany during the war, and unexploded munitions are still sometimes found.
The area sealed off included Horse Guards Avenue where the Old War Office is located, which was used by the British government during World War II.
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