Disposal team carried out a controlled explosion on a beach of what they believed to be a bomb.
The Sandy car park, at Seaton Carew, was sealed off after Cleveland Police received reports that a member of the public had seen a bomb.
They later found an item which has been identified as a boat motor.
However, during the visit to the scene, officers say they discovered something which appeared to be a bomb and carried out out a controlled explosion on Wednesday afternoon.
The blast was carried out by experts from the Army bomb disposal squad based at Catterick Garrison.
The device was taken by the bomb disposal team into the sand dunes at Seaton Carew before carrying out a controlled explosion.
Residents were warned to stay clear of the area.
A spokeswoman for Cleveland Police said: "We had a report yesterday of something that a person thought was an explosive device.
"The disposal team have come back this morning and found that it is a boat motor.
"We have now found something that the teams think is an explosive and they carried out a controlled explosion."
A spokesman for Catterick Bomb Disposal team said the area was safe for the public and they would safely dispose of the air drop bomb.
He said: "It is always the best thing for the police to do in these situations.
“They always need to call us in."
He said all along the North East coast was heavily bombed during the Second World War and it is not uncommon to find these devices.
Careworker Sarah Armstrong, who was visiting the beach with a group from Careline Lifestyle, in Bishop Auckland, said: "It is quite a shock. You don't expect this on your local beach.”