Devon and Cornwall officers were called at 3.15am today, and evacuated the hotel at 4.55am.
Guests and staff were told to leave the building immediately while officer searched for suspicious activity.
Falmouth is roughly 40 minutes by car from the Carbis Bay Hotel, where leaders from the world’s most powerful democracies will gather for the G7 summit from Friday.
Falmouth is being used as the main base for the world’s media covering the G7 summit.
A spokesperson said: “Following EOD assessment, the device has been declared not viable and therefore safe.
“In total around 100 people were displaced; these people are now being allowed back into their rooms and the 100-metre cordon is being removed.”