The explosive was found last night along Telok Blangah St 31, where a housing project is underway.
It is common to find relics and explosives during digging at construction sites as Singapore was within the bombing zones during World War II, and was occupied by Japanese forces between 1942 and 1945.
The Singapore Armed Forces' Chemical, Biological, Radiological and Explosive Defence unit has removed the explosive for safe disposal, said the reports.
Meanwhile, two dummy light anti-tank weapons were found by a person in a Singapore suburb.
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The post added that the unit has recovered both the weapons -- MATADOR (Man-portable Anti-Tank, Anti-DOoR).
"The SAF takes a serious view of this incident and investigations are currently underway," the armed forces said.
According to Ministry of Defence, the MATADOR is a 90mm calibre man-portable disposable anti-armour weapon system.