The bomb squad was called in and the scene cordoned off after the dramatic find in the Staffordshire and Worcestershire Canal this morning.
Martin Fuller, aged 65, was filming the canal bed as part of an underwater survey at Bratch Locks, Wombourne, when he came across the mortar, which is thought to have been buried in the 1960s.
The retired technician pulled the bomb out of the water himself and when members of the Canal and River Trust got a better look at it the police were called.
A controlled explosion was due to be carried out at a disused quarry in Wombourne this afternoon, with experts saying the 3-inch mortar poses no risk to the public.
Interactive map of the area:
Mr Fuller, from Weston, near Stafford, who has been doing the surveys as a hobby for around a year, said: "We were using an underwater camera to see what was on the bottom of the canal. It was half buried in silt and about 12 inches long.
"I had a fair idea of what it was. Once it was out of the water we thought it was a bomb.
"A couple of the Canal and River Trust lads said it was definitely a mortar and made the phone calls. They were keeping everyone away from the area."
Mr Fuller said he was not concerned about picking the bomb up, despite admitting it was the most scary thing he had come across on his surveys.
He joked: "I'm tough, I come from Staffordshire."
Army bomb disposals experts from The Royal Logistic Corps arrived at around 11am.
Staffordshire Police closed the towpath at Bratch Locks and people were urged to find an alternative route while officers deal with the situation.
⚠️ Officers are currently dealing with a suspected unexploded WWI bomb; due to this the canal towpath on Bratch Lock, #Wombourne is currently closed. Find an alternative route. @RHQ_The_RLC attending to assess.@StaffsPolice @CanalRiverTrust @StaffsDogs👮🏻♂️— South Staffs Police (@SStaffsPolice) January 15, 2019