People were forced to leave the busy station just after 3.30pm as a precaution whilst the item found on a platform was assessed.
Police and other emergency services in the region rushed to the station over the incident, which was resolved around an hour later.
British Transport Police announced shortly after 4.45pm that the item was "no longer being treated as suspicious" and New Street has since reopened.
A spokesman said: "The item has now been assessed by specialist officers and is no longer being treated as suspicious," with the force saying the item was a cannabis grinder shaped like a grenade.
Despite the station reopening National Rail Enquiries warned passengers: "Although the lines have now reopened, trains may still be cancelled, revised or delayed by up to 100 minutes as services return to normal," adding that disruption was expected for the rest of the day.
A spokesman for West Midlands Ambulance Service posted on Twitter: "We are aware of reports of a suspicious item at New Street Station in Birmingham.
"Ambulance crews are working with colleagues from West Midlands Police, British Transport Police Birmingham and West Midlands Fire Service. The station has been evacuated as a precaution while the item is assessed."
National Express West Midlands said they had accepted rail tickets on all bus services due to the incident.
Rail replacement buses were temporarily operating between Coventry and Northampton, Redditch and Longbridge via Bromsgrove, Lichfield City and Lichfield Trent Valley via Sutton Coldfield, Walsall and Rugeley Trent Valley and Wolverhampton and Shrewsbury.
People could use their Avanti West Coast ticket on West Midlands Metro services, their Chiltern Railways ticket via "any reasonable route" and London Northwestern Railway or West Midlands Railway ticket on National Express West Midlands buses via any reasonable route.