Excavation works at or near Ventnor Tennis Club have uncovered an object, believed to be an incendiary device, shortly before 15:00.
It is understood a gentleman was digging in a garden when he hit the object, which has been described as popping and fizzing.
The Isle of Wight Fire and Rescue Service have sent 13 firefighters to the scene.
Initial reports received by the Isle of Wight Fire and Rescue Service indicated that the currently unknown device had been located on Grove Road, however the incident is in fact at the junction of Mitchell Avenue and St Boniface Road.
Bomb disposal experts concluded their work in Freshwater before being redeployed to the scene on the outskirts of Ventnor Town Centre.
Emergency services have left the scene, which was in the garden of the Hillside Hotel.