Approximately 1,900 households with 6,000 people had to be quickly evacuated in connection with the discovery.
The bomb was discovered by construction workers in a residential and commercial district in the western part of the city on Friday evening.
"We have confirmed that the object is a bomb from World War II", says a police officer to the news agency AP.
The work of disarming the bomb was ongoing during lunchtime on Saturday, local time. No one is reported to have been injured.
Hong Kong was occupied during World War II by Japanese forces and was bombed by the USA to disrupt the Japanese supply lines.
