Police are investigating the discovery of a World War I hand grenade at a garage sale in Casino, in northern New South Wales, over the weekend.

The 1915 device was on sale for $50.

Police spoke with the owner, who told them the grenade belonged to her grandfather.

Detective Inspector Matt Kehoe says officers seized the grenade and contacted the bomb squad.

"Bomb experts have confirmed that the device is a genuine grenade from 1915," Detective Inspector Kehoe said.

"The grenade was still intact, it still had the pin in it.

"[We had] advice from our bomb techs and the Army that it was safe to handle in that state."

Police say it is dangerous to sell old weapons to the public.

"The sale of prohibited weapons of this type does carry significant penalties and can carry a prison sentence of up to 20 years," Detective Inspector Kehoe said.