Victoria Police's bomb squad detonated the device at 7.30pm, about five hours after it was found near a bus shelter at the front of Brauer College in the state's south-west.

A police spokeswoman said arson chemists will now examine the device, which has been "rendered safe", while local detectives continue investigating how and why it was left there.

The school was locked-down after the discovery and a 100 metre exclusion zone was put into place, the Warrnambool Standard reported.

The exclusion zone has been removed, the spokeswoman said.

Students were moved to the school's auditorium and had to leave the school via the northern exits.

Assistant principal Rob Porter contacted police at 2.30pm after the device was found.

Staff at businesses in the area have been evacuated or told to stay away from windows.

Warrnambool Police Sergeant Callum McKinnon said it was "definitely a pipe bomb".

Police took photos of the device which were forwarded to the bomb squad based in Melbourne.

Three bomb squad members are expected to arrive at the scene around 6.30pm tonight.

Traffic was being diverted at Raglan Parade and Fotheringham Street.

It is believed students will be taken to Raglan Parade where buses will conduct their usual end-of-school pick-ups.

Parents were told collect their children from the northern end of the school, near Brauerander Park.

The State Emergency Service has been called in to assist with traffic diversions and police are asking people to stay away from the immediate area.

An information night at the school has been postponed until tomorrow.

Warrnambool Standard, with Tammy Mills