The A4150 Ring Road was heavily congested, as were Stafford Street, Birmingham Road, Wednesfield Road, Horseley Fields and Bilston Street, while the bus station was also cordoned off for a few hours.
The Explosive Ordnance Disposal Team was called to attend the scene after the discovery was made at around 3pm on Friday in the canal near the city's railway station.
However, on closer inspection, the bomb was found to be a concrete-filled practice device and was in no danger of causing an explosion, leading to roads and the bus station being reopened.
A spokesman for West Midlands Police said: "The device was recovered from the canal and found to be a concrete-filled practice device; there was no threat of an explosion.
"The cordons were removed and road closures lifted shortly after 6pm."
The device discovery comes only weeks after a suspected mortar round was found in a Wolverhampton canal.
The area around the canal network in Horseley Fields was closed off as bomb disposal experts were called on Easter Monday.
The Explosive Ordnance Disposal team was then called and a controlled explosion carried out.