UPDATE, WEDNESDAY 7.20am: Police have confirmed the road blocks around Napier Street have been removed.
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A spokesman said the device retrieved by the bomb squad was not capable of ignition.
Investigations are continuing.
UPDATE, TUESDAY 9.20pm: The object has been found to be non-explosive but road blocks remain in place on Napier Street.
UPDATE 8.20pm: A remote-controlled robot with a claw and camera has removed a cylindrical object from the Napier Street home.
The bomb squad remains on scene assessing the object.
UPDATE 7.40pm:
The Bomb Response Unit has entered the Napier Street property to assess what police have described as a suspicious package.
STORY
Police have closed a main road in Bendigo after discovering a suspicious package in a suburban yard.
Sergeant Tony Kekich said police had called in the bomb squad from Melbourne to assess the package, which he described as covered in tape and with visible wiring.
“We think it’s possibly explosive...so we've called the Bomb Response Unit from Melbourne,” Sergeant Kekich said.
Police are currently diverting northbound traffic on Napier Street down Weeroona Avenue and southbound traffic down Powell Street.
Sergeant Kekich said police were calling on residents of neighbouring properties to stay indoors – and warned police could well divert traffic throughout the night.
“If they do choose to leave they can leave, but not to come out and interfere with our operation,” he said.
“We'll be here for quite some time, I'd imagine, these road closures will be in place for the whole duration and if the item is deemed to be dangerous...well were going to be here for a whole lot longer.”
Sergeant Kekich said police were called to the scene at about 2.30pm after the occupier of the Napier Street property found the device on his front lawn.
By 4.50pm police established an inner perimeter of about 25 metres around the house in case of an explosion. They also established an outer cordon several hundred metres away to divert traffic in either direction.
The bomb squad is expected to arrive at about 7.30pm.
MORE TO COME