Army technical officers made the device safe and took it away for examination.
A number of houses in County Tyrone were evacuated on Sunday after a viable explosive device was discovered.
The PSNI carried out three searches of houses in Drumrallagh Estate, Strabane as part of investigations into violent dissident republican activity.
Police in the North discovered a viable explosive device in one of the homes, which resulted in the evacuation of 10 nearby houses shortly after 5pm.
The ammunition technical officer (ATO) attended the scene to ensure the device safe and it was taken away for further examination.
Three men aged 43, 45 and 77 were arrested at the scene under the Terrorism Act and were taken to Musgrave Serious Crime Suite for questioning.
“Firstly, I would like to thank the local residents for their patience this afternoon whilst this operation was ongoing. It is beyond belief that terrorists have stored a bomb in the heart of one of our communities,” said Superintendent McCalmont.
“Fortunately this device was found and made safe before it could cause any harm, however, it clearly shows the intent of those individuals to kill or seriously injure.
“They have absolutely no regard for the safety of local residents in the Drumrallagh area.
“People involved in hiding bombs want to cause harm, they don’t care who gets killed or injured, and their desire to pursue violence and create more victims, has to be challenged.”
McCalmont asks any witnesses or anyone in the North with information to come forward by ringing Crimestoppers on 0800 555 111 or police on 101.
The train line between Lurgan and Moira was closed for a time due to this security alert but has now reopened.