Training equipment left on a Sydney ferry has been blamed for a security scare which sparked the evacuation of Circular Quay.

The precinct was put in lockdown on Thursday as police investigated a suspicious package found on a ferry from Balmain, docked at Wharf 5.

A crew member found bottles with protruding wires and filled with nails and liquid and raised the alarm.

The bomb squad was called to the scene to investigate but the area was declared safe a short time later and Circular Quay was reopened.

The ABC has revealed the bottles were training equipment and were meant to be used in a security exercise.

A source said the equipment did not belong to police.

Harbour City Ferries later confirmed the package was a training device, but said it was not recognised by staff as a typical training device.

Detective Inspector Dave Richards said there was never any danger to passengers.

"We don't believe it was a threat to the public at this point in time," he said.

"Certainly New South Wales Police deem any suspicious package as a serious concern and we treat those until they're deemed non suspicious," he said.

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