Cordons were put in place after the object was found by a member of the public on the Priest’s Road in Castlewellan on Wednesday evening.
Police said that while the device was not viable, it could have been part of “something more sinister”.
Police cordons have since been lifted.
Detective Inspector Graham Orr of the PSNI’s Terrorism Investigation Unit thanked the community for their cooperation during the recovery operation.
“The component will now be subject to detailed forensic examination however our initial assessment is whilst this was not a viable device, it is clear that this is a component that could have been part of something more sinister,” he said.
“We know that the vast majority of people support our police officers and simply want to live in a peaceful society.
“We will continue to work with communities to disrupt the activities of the small group of people who are intent on using violence.”
Anyone with any information regarding the incident has been urged to contact police on 101, quoting reference 1860 of 18/09/19.