Army bomb experts examined the object before it was removed from the scene.
The alert on the Glengalliagh Road area of the city began at about 22:34 BST on Thursday.
The road has now been re-opened.

Construction on the £65m Bontnewydd road was due to start towards the end of this year.
The Welsh Government said it rejected suggestions of "huge delays" to the scheme.
Orders detailing the project were due to be published in the spring. They are now expected to be made public in August.
Arfon AM Sian Gwenllian has said she fears the construction work could be put back by up to a year.
"The orders were supposed to have been published at the beginning of this year, and they haven't been, and it's likely that this scheme will not proceed for at least another 12 months," she warned assembly members last week.
"I understand that the problem is a dispute as regards what to do about the bats."
The six-mile (10km) route will take the new road around the current bottlenecks between Bontnewydd and Caernarfon, linking with the Felinheli bypass.
The new road will cross two rivers, and requires seven bridges.
A Welsh Government spokesperson said on Tuesday: "In order to assure everyone that the most appropriate environmental mitigation measures are being implemented, some short additional surveys are having to be undertaken in the next few weeks."
Officials said they expected construction work to get under way in August or September in 2017.
Welsh Government documents had suggested the work should have started by the end of this year.
Peter Evans,  the protected species officer for Natural Resources Wales, said the route passes close to a special area of conservation.
"There are concerns because this is a migration route for animals like the otter and the lesser horseshoe bat, which are protected species," he said.
"We are working with the developers at present to get more information about how bats use the land along the route."

Davies suffered an ankle injury during Spurs' 1-0 defeat by Bayer Leverkusen in the Champions League on 2 November.
He then missed the 1-1 draw at Arsenal in the Premier League on Sunday.
The 23-year-old had been included in the Wales squad for the qualifier in Cardiff but has now been replaced by Sunderland's Adam Matthews, who is on loan at Bristol City.
Davies has started in Wales' opening three qualifiers.
Serbia are top of Group D after three matches on seven points, with Wales third on five points.

The Royals secured their play-off place with a 1-0 win over Wigan on Saturday and are third with a game left to play.
"For us, it's important to stay up there and be happy with where we are going into the semi-final," Stam said.
"It's going to hard and a big battle as all the teams up there are good and have quality individuals."
Stam, who took charge of Reading in the summer, praised the squad's achievement in finishing in the top six.
"I'm very proud of the players," he told BBC Radio Berkshire. "A top six finish is something you hope for at the beginning of the season, but that depends on the progress of the team.
"It's a big achievement and a big compliment to the squad in how they've done this season."
Reading travel to Burton for their final game of the regular season on Sunday and would face sixth-placed Fulham in their play-off semi-final as things stand.
But, former Manchester United defender Stam is not too concerned with who they might face.
"We're going to give it our best shot," he said. "We want to finish the final game well as we don't want to go into the play-offs with a disappointment."
A security alert in Londonderry has ended after police declared a suspicious object to be a hoax.
[NEXT_CONCEPT]
Work on a major bypass in Gwynedd is facing delays as talks continue over protecting wildlife.
[NEXT_CONCEPT]
Tottenham defender Ben Davies has been ruled out of Wales' World Cup qualifier with Serbia on 12 November.
[NEXT_CONCEPT]
Reading manager Jaap Stam believes momentum rather than a highest-placed finish will be most important going into the Championship play-offs.