The ordnance was found in the River Thames early Sunday during planned development work at the airport, which lies east of the Canary Wharf financial district.
Royal Navy specialists established an exclusion zone of more than 200 meters (650 feet) to handle the situation, the Metropolitan Police said in a statement.
“The airport is cooperating fully with the Met Police and Royal Navy and working hard to safely remove the device and resolve the situation as quickly as possible,” Robert Sinclair, CEO of London City Airport, said in a tweet.
The airport advised all passengers due to travel Monday not to go there, and instead contact their airline for further information.
Earlier, the British Airways website showed flights to and from London City Airport cancelled until late Monday. CityJet cancelled one flight to Dublin and said all its flights to and from the airport will “experience disruption” Monday.