An emergency operation was launched on Thursday after the suspicious item was found in a laneway behind a bank branch about 7.30am.

Police urged people to avoid Burringbar Street and Station Street and established a 200m exclusion zone around the bank.

Additional resources, including a rescue and bomb disposal unit, were sent to the scene and arrived in Mullumbimby on Thursday afternoon.

Authorities have assured locals the pipe bomb is no longer a risk.

"It's all been resolved, with the item rendered safe," a NSW Police spokeswoman told AAP.

Detective Chief Inspector Matt Kehoe earlier said police had received "no threats, no calls, no letters, no other information" about the object, which was found by local shop owner Mark Thomas.

"We can just go on the fact that the device was located where it was and we've taken all precautions to make sure the community is safe," Det Chief Insp Kehoe told reporters on Thursday.

Mr Thomas, who discovered the object near his store, said it was like a metal pipe, capped either end with "circuit-board-looking stuff and a switch".

"I couldn't see it properly so I rolled it over, 'Oh yeah, looks like someone has made a bomb for Halloween but, you know, could be real so better call the police', and so here we are," he told the ABC.

Australian Associated Press