A member of the public reported finding the bag in Castle Road at about 7am on Tuesday 11th August.
The area was cordoned off as a precautionary measure while specialists from the Explosive Ordnance Disposal (EOD) unit examined the contents.
Barwell Road, near to the junction with Church Road, was also closed to vehicles and pedestrians while initial enquiries were conducted.
The device was found to be ignitable and was safely dismantled. No one was injured.
Officers are now investigating the circumstances and initial enquiries suggest it was an isolated incident.
Police are keen to hear from anyone who may have been in the area during the early hours of the morning, or who saw anything suspicious.
Detective Constable 4461 Helen Small said:
“There was significant disruption to local residents as a result of the road closures and I would like to thank everyone for their patience.
“The safety of the public is paramount and the road closures were in place while experts examined the device and safely dismantled it.
“We are now conducting enquiries into the incident and are keen to hear from anyone who might know who left the bag in Castle Road.”
Anybody who saw anyone acting suspiciously in the area during the early hours of the morning or have any information that could assist their enquiries is asked to call DC 4416 Small on 101 or Crimestoppers anonymously on 0800 555 111.