Bomb disposal experts called to the scene in Troon, Ayrshire quickly established that the find was an empty naval mine casing.
Police were alerted to the discovery just after lunchtime yesterday.
The object was pulled into the harbour in the nets of a fishing boat, where it was left in the water as emergency services were called.
Cottages in Harbour Road alongside a local takeaway, McCallum's Chip Shop, and sawmill Adam Wilson & Sons, were evacuated as a precaution.
Police said the area was cordoned off but at no time was there a threat to public safety.
A police spokeswoman said: "Officers were called to a report of the discovery of a possible old mine at Troon Harbour."
The bomb squad from the naval base at Faslane on the Clyde were called to inspect the device.
Locals were allowed back into their homes and businesses by 4pm yesterday.
A Royal Navy spokesman said their bomb squad found that "a 500lb charge case" which, it is expected, they will take out to sea today and destroy in a controlled explosion.
A year ago Ayrshire Allan Baird and his son Craig, 13, found two unexploded bombs at their farm near Symington.