The bomb was found Tuesday during hydraulic works on the city's seafront, and prompted the local town hall to clear everybody within a 1.8km radius.
Fano is located on Italy's eastern Adriatic coast, just under 300km north of Rome.
On Wednesday, the town hall said the bomb was neutralized in "a special and highly risky operation" by army and navy experts, who lifted it and dropped it in the sea.

The explosive device was found at a construction site in the small town of Fano. Source: AAP
Mayor Massimo Seri announced that Fano was "out of danger and fully safe," as he revoked evacuation orders and allowed local shops, public offices and the hospital to reopen.
The local train station, port and airport were also back in service.
According to the SkyTG24 news channel, the 225kg TNT bomb had a delayed fuse that was accidentally set off, and could have exploded within 144 hours of its discovery.
After the collapse of its Fascist regime in 1943, Italy was invaded and became a battleground between advancing Allied troops and retreating Nazi forces.
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