UPDATE 2:07 PM
Police have removed the device and the area around the police station is no longer in lock down.
Traffic is now flowing normally in the area.
A number of residential streets at Euroa have been evacuated, following the hand-in of a hand grenade on Tuesday.
Police from Melbourne's Bomb Response Unit are headed for the town to inspect the Japanese hand grenade, suspected to be circa World War II, which is currently being held at the Euroa police station.
Euroa police Senior Constable Scott Nash said the grenade was handed in this morning by a resident who discovered the object in a house on McGuinness St.
It is unknown whether the grenade is live, Kirkland Ave has been closed off and there is currently no risk to the public.