Officers investigating a package found at a tube station in London two days earlier had been at a property in Tudor Road, Newton Abbot, when they discovered an item they deemed suspicious.
People were moved out of the area but a 200-metre cordon has now been lifted, Metropolitan Police said on Saturday.
In a statement, they added: "Work has been carried out and it has now been confirmed the device is not viable.
"Work continues with Devon and Cornwall Police at the scene."
During the evacuation, three pitches at Baker's Park in the town were cleared.
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Phil Smith, 62, who was refereeing a football match, said: "We were eight minutes into the match when suddenly a policeman appeared on the touchline and said 'Sorry, you are going to have to stop playing and get out of the park - we want to land some helicopters on the football pitch'.
"He said there was an incident but couldn't say anything about it.
"He proceeded to hustle us all off and then he went to the children's play park and hustled all them out and was trying to get the car park clear as well."
Saturday's discovery followed a security scare at North Greenwich station close to the O2 complex in southeast London on Thursday.
A controlled detonation was carried out on that item, which was reported to have been handed to a Tube driver and possibly contained wires and a clock.
A 19-year-old suspect arrested on Friday remains in police custody following the incident.
Commuters were told to expect to see more officers, including armed police, in and around transport hubs while patrols by British Transport Police officers on the underground and at stations are in place.
The current threat level for international terrorism in the UK is severe - meaning an attack is "highly likely".
