Detective Senior Constable Jacob Sinclair said police executed a search warrant about 3.10pm before the area was evacuated.
“Inside the house a hand grenade, suspected to be live, was discovered,” he said.
The immediate area surrounding the caravan park was cordoned off and the neighbouring caravans were evacuated.
Army personnel arrived about 6.30pm and the ‘‘green single hand grenade’’ was confirmed live, placed in a bag and the area deemed safe.
“The area was cordoned off to a safe distance and we had the Explosive Ordnance Disposal Unit from the Australian Army attend to dispose of the grenade,” Det Sen Const Sinclair said.
“They will make it safe and transport it down to our forensic services lab for forensic testing.”
A witness at the scene said he hadn’t heard of anything strange.
“I know a few of the locals who live live there and they are pretty good,” the man said.
“They stick to themselves. You might hear a little argument every now and again but that’s just normal.”
A 20-year-old man was arrested and is assisting police with their inquiries.
Det Sen Const Sinclair confirmed police also found a bag containing an amount of drugs inside the caravan.
Police confirmed the search warrant was conducted in relation to an ongoing investigation.