Part of Borough High Street was cordoned off after a suspect package was found near a bus stop.
Police were called to the road at 4.40pm and remained at the scene for more than a hour to investigate the item, discovered opposite a Sainsbury's store.
A stretch of road between Borough Tube station and Southwark Street was taped off but has since reopened after the object was deemed not suspicious.
Police said it was exploded in a controlled blast just after 6pm.
Witnesses told how they were "barricaded" inside pubs and supermarkets before they were moved out of the exclusion zone at the height of the security scare.
Friends Michael Grande, 26, and Ryan Sketchley, 30, were watching football inside The Blue Eye Maid when the incident unfolded.
Mr Grande said: "We were just watching the West Ham game when we looked out of the window and saw police closing off the road.
"A couple of women holding coffee cups were standing outside and they were asked to move into the pub.
"About 15 minutes later were told to move to near the Tube station."
Mr Sketchley said the package appeared to be a "nondescript" brown bag which was discovered on top of the bus stop.
Another man said he was kept in Sainsbury's for half-an-hour where customers were told to keep away from the shop window.
He said he saw around four police officers to start with before more arrived when the supermarket was evacuated.
Worshippers at The Globe Church were moved to nearby Mint Street Park to finish an afternoon service after the building was evacuated.
Leaders posted a picture of the congregation on Instagram and said prayers were held "for the safety of our city".
