Police were alerted after a small bottle containing about 50g of silver acetylide - a highly explosive chemical - was found in a McNab St commercial premises about 3.15pm.
Police initially cordoned off each end of McNab St and called in Fire and Emergency New Zealand, which consulted experts to identify the chemical, a Fenz spokesman said.
The Defence Force was called in to dispose of the chemical, and an explosive ordnance disposal team was sent from Christchurch late in the afternoon.
A police spokesman said the explosive ordnance disposal team carried out a controlled detonation of the chemical this morning.
The chemical was not considered an immediate threat, but a NZDF spokeswoman refused to elaborate.
A business owner near where the chemical was found declined to comment last night.
A Fenz spokeswoman said the chemical was in an isolated area and safe for now, although the concern was it was potentially "highly explosive''.
"We just basically played safety officers.''
The site was under a police scene guard overnight, but NZDF staff were expected to dispose of it this morning "in an exciting manner''.
