A Sydney man's home renovations have taken a potentially explosive turn, with the discovery of an artillery shell under the floorboards.

The man, from Coogee in the city's east, found the unexploded shell just after 5:00pm (AEDT) yesterday.

Police set up an exclusion zone and evacuated about 40 residents from Oberon Street while the bomb squad and army bomb disposal experts removed the shell.

The shell, which is believed to be a relic from World War II, will be destroyed this morning at Sydney's Holsworthy army base.

Chief Inspector David McBeath says anyone hoarding similar military memorabilia should contact police.

"You'd be surprised by the number of people that have relics from conflicts, from days gone by, that are hanging onto them for whatever reason," he said.

"Well, that's just not a good idea. Anyone that's got one of those things about their homes, be careful, let us know, and we'll come and take them away."