Concerns about the bag, which was left in Kirkgate Market, prompted a major evacuation yesterday.
Police cleared shoppers and stall holders from the historic building and also closed off a number of surrounding streets for several hours.
Army bomb disposal experts were drafted in to study the package and examine the scene, before a controlled explosion was carried out and the all clear was given.
It was only then that police revealedtwo men from Leeds had been arrested on suspicion of going equipped to steal.
The men, aged 26 and 30, faced questions about the contents of the bag while forensic work continued at the scene.
A West Yorkshire Police spokesman today said that both of the men had been released later without charge.
The market reopened for business as usual this morning.