Officers have closed Racecourse Road between its junction with Alder Road and Ballyarnett Roundabout in Derry following the discovery of a suspicious device.
A section of Ballyarnett Village has also been closed to traffic.
Army technical officers have been tasked to the scene.
PSNI Chief Inspector Tony Callaghan said: “Police are currently investigating these reports.
“I would urge anyone who sees anything out of the ordinary in the area to maintain a safe distance and report it to police immediately.”