Contractors working on the breakwater found the object at around 13:40 before alerting HM Coastguard, who have deployed Cowes RNLI lifeboat to the scene alongside Bembridge Coastguard Rescue Team.
Explosive Ordnance Disposal (EOD) teams are expected to go out onto the breakwater to carry out a small controlled explosion.
UPDATE @ 15:45 – Coastguard teams are withdrawing from the incident due to the rising tide, which is now covering the breakwater.
The incident has been left in the hands of the EOD experts, who are currently deciding on the best way forward to bring a resolve to the situation. The shell is understood to be 40mm in diameter.
It is thought the explosive is an anti-aircraft shell from the Second World War.
UPDATE @ 18:32 – Ordnance Disposal experts from Portsmouth will arrive on the Island tomorrow morning (Friday) to safely dispose of the device, it has been confirmed.
The team from Portsmouth are using a boat to go out to the breakwater, where a controlled explosion is expected to take place.
Anyone who discovers an object they believe to be explosive, modern or historic, are advised not to touch the object but to call 999 and ask for the Coastguard.
Featured Photograph: Nick Edwards