The Second World War munition is currently being towed out of the harbour.
The Royal Navy is leading the operation to destroy the 500lb German bomb.
The device was found at 5am this morning by a barge dredging the harbour ahead of the arrival next spring of HMS Queen Elizabeth – the Royal Navy’s new 65,000-tonne aircraft carrier.
The bomb has been temporarily moved to allow the re-opening of the continental ferry port and a plan is being put in place to tow it out of the harbour off the Isle of Wight where it will be destroyed in a controlled explosion.
The tow began at 2pm. The harbour will be closed to ferry traffic for up to one hour as the device passes the harbour entrance.
The controlled explosion 1.5 miles off the eastern Isle of Wight will be carried out either later today or early tomorrow, a Royal Navy spokesman confirmed.
Captain of Portsmouth Naval Base, Captain Bill Oliphant, said: ‘This is the third piece of historic ordnance found in the harbour during the dredging works since September.
‘Again we are working with Hampshire Police to ensure we deal with this incident in the safest way possible, at the same time causing least disruption to the city.’
Residents and shoppers in Gunwharf Quays had been evacuated from their homes after the bomb was discovered.
But a spokesman for Hampshire Constabulary has said this cordon has since been lifted.
The source added: ‘We are pleased to confirm that the historic ordnance has been safely towed from Portsmouth Harbour.
‘As a result the cordon placed around Gunwharf and Old Portsmouth has been lifted.
‘We would like to thank everyone for their patience and co-operation as we dealt with this incident.’
Ferry services are also due to be resumed in the harbour.
Wightlink’s catamaran service will get underway from 3pm in Portsmouthm and 3.47pm from Ryde Pier Head.
The first car ferry will also sail from Portsmouth at 3pm and from Fishbourne at 4pm.
A spokeswoman for the travel operator said: ‘Wightlink staff will do their best to get all customers to their destinations as soon as possible.
‘We are sorry that Wightlink customers were inconvenienced by this harbour closure.’