Army ordinance officers were called to Balgownie last night after an unexploded mortar shell was found.
A resident of Balmoral St was knocking down a fence about 6.30pm when he discovered the shell during excavations.
Wollongong police said representatives from the Army and Air Force were called in to investigate the object.
The ordinance officers determined the fuse had been removed from the shell and took it to Holsworthy Barracks to be destroyed.
Police did not know how the shell came to be buried in the suburban yard.