The device was thought to be a pipe bomb but turned out not to be a viable threat.
Residents from about 40 houses at Shortcourse, an old inner city residential area adjacent to Barrack St and near the former military barracks, were evacuated at about 8.30am.
One local said it was scandalous as many elderly people, one of whom was housebound and on oxygen, had to leave their homes in a hurry.
They were not allowed return to their homes for four hours , once the unit had inspected the suspect device and declared the area safe.
Barrack St was closed from Convent Hill to Mayor’s Walk.
Waterford City and County Councillor John Hearne, the Metropolitan Mayor, said more gardaí were needed on the streets.
“We just need more police. It’s a ridiculous situation. Waterford was never like this, and we’ve never had so few police. We need more officers,” said Mr Hearne.
Gardaí are carrying out their investigations and anyone with information can contact them on 051 305300.