A worker for Ballarat City Council found the home-made grenade near Winter Street in Delacombe at around 3.40pm on Wednesday, according to police.

The arson and explosive squad was called from Melbourne immediately, with a bomb disposal robot attending the scene near Sutton Street.

Witnesses said the bomb was detonated just before 8.30pm. No one was injured during the police operation.

Moorabool Police Crime Investigation Unit Senior Constable Sam Young told The Courier the device found was a black rectangular box with a "grenade mechanism on top".

He said an exclusion zone and traffic stops were put in place, with around eight police members at the scene.

"Most of (the detonation) didn't take that long, (the bomb squad) was quick to determine what it was and clear it," Senior Constable Sam Young said.

Police are continuing their inquiries into who created the bomb and whether it contained active explosive material. Local residents were door-knocked during the episode.

Acting Sergeant Luke McGregor said in his experience as a police officer in Ballarat, he had never heard of a IED being found in public.

Anyone with information is urged to contact Crime Stoppers on 1800 333 000.

Have you signed up to The Courier's variety of news emails? You can register below and make sure you are up to date with everything that's happening in Ballarat.