The boy was arrested on Thursday (May 5) after police evacuated families from homes in Kirkstall Close and a British Army bomb squad inspected a ‘suspicious object’.
The Royal Engineers Bomb Disposal team inspected the package and found what they described as “the component parts of an improvised explosive device (IED).”
After examining the device, the Army was satisfied that the device was not viable and the explosives were seized.
The teenager was arrested on suspicion of an offence under the Explosives Act – possessing an explosive substance for unlawful purpose.
He was also arrested on suspicion of possessing a knife/bladed or sharp pointed article in a public place.
A police spokesman said: “We were called to an address in Kirkstall Close, Chorley, following reports a suspicious object had been found.
"Officers, including our colleagues from the military, attended and found what are believed to be the component parts of an improvised explosive device (IED).
"However, examinations have revealed that the device was not viable and there was no immediate threat to the public.
“A cordon was established around the address, a small number of nearby properties were evacuated and surrounding roads were closed as a precaution.
“A 16-year-old boy from Chorley has been arrested on suspicion of possessing a knife/ bladed article and an offence under the Explosives Act.
"He has been released on bail pending further enquiries.”
Anyone with information should call police on 101, quoting log 841 of May 5, 2022.