West Yorkshire Police confirmed that officers were called soon after 1pm this afternoon.
A cordon is in place in Town Street, Horsforth, and vehicles are being diverted.
"Police were called at 1.07pm to an address on Town Street by someone who reported a possible hand grenade found while clearing out a relative's property," a force spokesman said.
He said that Explosive Ordnance Disposal, possibly from Catterick, was en route.
Meanwhile, the 9, 50 and 50A bus services were being diverted.
The force later said: "The item has been deemed to be safe and has been removed by the EOD. The cordon has been lifted."