The public is being asked to avoid the Founders Heritage Park in Nelson as items in the facility are checked for an explosive material.
A police spokesperson said the NZ Defence Force's Explosive Ordnance Disposal (EOD) unit is carrying out an assessment of the material on Atawhai Drive.
A post on the Nelson City Council facebook page said the items are being checked for picric acid.
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"Picric acid was widely used in early forms of medicine and medical supplies, including on gauze pads and as an antiseptic. It is a volatile substance sensitive to heat, friction and shock, and has been used as a military explosive.
"Any items considered hazardous will be removed for safe disposal off-site."
A childcare centre and marae in the area have been evacuated as a safety precaution.
"There will be a visible Police presence in the area for the next couple of hours while the NZDF's EOD unit disposes of the material safely.
"Police want to acknowledge the public for their patience and co-operation while the assessment is carried out."
The spokesperson said staff are working closely with the NZDF's EOD team to ensure the incident is managed safely.