An unsuspecting fisherman found the device, which was covered in marine debris, on Lord Howe Island's Elizabeth Reef in April, with Defence personnel saying it could have posed "a significant risk to the general public".

The local angler and his wife were visiting the reef, about 550 kilometres off the coast of NSW.

He photographed his discovery and reported it to authorities.

The reef was closed in September before Navy clearance divers aboard HMAS Adelaide carefully removed the abandoned explosive by floating it to the surface and towing it further out to sea.

The bomb was then dropped into 550 metre-deep waters.

"That depth is really safe. It's not going to ever get washed back up onto the reef," senior marine parks officer John Pritchard said.

"There's no deep-sea fishing or trawling allowed out there. It's a recreational fishing zone only.

"The chances of that UXO [unexploded ordinance] ever coming back to the surface is negligible."

Environment Minister Sussan Ley said the fisherman and Navy divers had potentially saved lives as well as one of Australia's most important reefs, with the bomb having the potential to cause "extraordinary" damage to the protected area.

"Obviously when there is unexploded ordnance, human safety is the number one factor and that couldn't be discounted either," she said.

"So the fact that our Navy did an amazing job towing this bomb to water that was 550 metres deep so it could be disposed of sensitively and appropriately is really good news now that the reef and the area is reopened."

She said the bomb was dropped "well away from any sensitive coral atoll".

Bomb could date back to WWI

The bomb's origin is unknown and divers could not estimate its age due to its deterioration.

Bombs of that size were used as long ago as World War I and sometimes dropped from aircraft to target submarines.

Ms Ley said it was possible the bomb had been on the reef since World War II, or it may have been moved to the area by a cyclone or ocean currents.

"We've never found, to my knowledge, anything like an unexploded ordinance in any of our 58 marine parks, so the fact that this one is here is very unusual, but it's always a reminder just to keep your eye out, particularly in that part of Australia's coral reef environment," she said.

She said the operation to remove the bomb took place at the end of September after a team of experts decided how to remove and relocate the device safely.

Elizabeth Reef is about 160km north of world heritage-listed Lord Howe Island and spans 8.2km by 5.5km.

Along with nearby Middleton Reef, it is the world's most southern coral reef platform.

"There have been 125 corals identified there [and] over 300 species of fish," Mr Pritchard said.

"It's quite a unique environment and, because it's so far from anywhere, it's relatively untouched."