However, despite the exciting find by workers of Holland Contracting & Conservation Limited (HCCL), the company responsible for dismantling the historic building, the capsule has refused to reveal its contents.
Now the glass container, which appears to hold copies of newspapers and documents, has been sent to the Black Country Living Museum for specialists to open.
Woodside Library is currently being taken down brick by brick and is to be rebuilt as a dramatic centre-piece for the new 1940s to 1960s Black Country town at the museum.
The land for the library and Woodside Park was donated by the Earl of Dudley in 1890 and was previously the site of the Earl's large Woodside Colliery.
The library played a huge role in the lives of the people of Dudley and by transferring it to the museum it is hoped that not only will this salvage the architecture of the building but also help re-tell the story of the community it served and the people of the Woodside area.
West McGowan, the 32-year-old recorder for HCCL, based in Dudley, has the task of identifying every brick of the historic library building and ensuring that they are put in the right place when it is re-erected at the museum site.
He said: "The task is like a giant jigsaw and we also hope to use brickwork and items from the old fire station which used to stand next to the building as donor parts.
"The finding of the time capsule is exciting as it has been there since 1894.
"However, there are no maker's marks on the glass container and we have found it impossible to open.
"Because of this we have sent the capsule to the museum where it will be opened in due course and where we expect it will go on display."
Mr McGowan added: "A new time capsule is expected to be created to go in its place when the building is completely rebuilt on the museum site.
"It was discovered beneath the plaque which was unveiled at the opening ceremony.
"We started dismantling the library building in February and are already 96 per cent through this work and this could take another week to complete.
"Every brick is identified and it is a big task and I also write the instructions for recreating the building.
"Then we expect work to begin on the rebuilding of the library.
"Previously we have been involved with the transfer of the fish-and-chip shop, from Dudley, and a run of shops from Old Birmingham Road, to the museum."
People can find more information about the company's work through the hollandconservation.co.uk website.