The shopping and retail centre, along with homes, have been cleared along with the Wightlink ferry terminal, the Gosport Ferry station and Portsmouth Harbour Station.
Police said homes in Old Portsmouth are also being cleared after the discovery of the bomb this morning.
Evacuations took place before the bomb was towed out of the harbour ahead of a planned controlled detonation this afternoon by the Royal Navy.
Rest centres have been set up in the St Thomas’ Cathedral for evacuated residents of Old Portsmouth and at the John Pounds Centre in Queen Street for Gunwharf Quays residents and Wightlink customers.
Gunwharf resident Anthony Dunne is one of those to be evacuated from his home.
The 27-year-old University of Portsmouth student said he was heading to the cathedral along with hundreds of others.
‘I had a police officer knock on my door and tell me I had to evacuate,’ he said.
‘To be honest, that wasn’t much of a surprise. I had seen the news this morning.
‘But there are people packing stuff from their homes into their cars and leaving.
‘There are a lot of people just walking around trying to get away.’
He added the mood among evacuated residents and shoppers was ‘calm’.
The 300m cordon will also require other areas to be evacuated, including the Wight Link terminal; Gunwharf Quays; parts of Old Portsmouth - including Tower Alley, Bath Square, West Street, the Camber and the Hotwalls area; The Hard, including Portsmouth Harbour station and the Gosport Ferry; and the Clarence Pier area and Long Curtain Moat car park and footpaths.
The following roads have also been closed, Bath Square, West Street, Broad Street and Tower Street.
Hampshire Police said ‘Evacuation will begin at midday to allow for the safe disposal of a historic piece of ordnance found in Portsmouth Harbour this morning.
‘We are supporting the Royal Navy to ensure the safe evacuation of the area as they prepare to tow the device out to sea.
‘Officers will begin the evacuation of both the shopping and residential areas of Gunwharf Quays.
‘Those evacuated from the Gunwharf Quays area will be directed to the John Pound Centre, in Queen Street, one of two rest centres set up.
‘The other is at Portsmouth Cathedral.
‘The 300m cordon will also require other areas to be evacuated, including the Wight Link terminal, Old Portsmouth, Portsmouth Harbour station, Gosport ferry station and the Hot Walls areas.
‘We would like to urge members of the public to avoid these areas.
‘We understand that this will cause disruption for some time however our priority is the safety of everyone in the area.
‘We would like to thank everyone for their patience.
‘Any questions about travel disruption should be directed to the operator and those requiring further information about rest centres should contact the Portsmouth City Council helpdesk on 023 9283 4092.’