The device was found at an address in Devon, Scotland Yard has said.
A 19-year-old was tasered and arrested in the capital after the station was evacuated for almost seven hours.
Sky News sources said the discovery is linked to another device which was found on the London tube on Thursday morning.
"Local officers have since put in place 200 metre cordon in the area".
London's Metropolitan Police says officers were searching an address on Friday in the southwest England town of Newton Abbot connected to a 19-year-old man arrested on Thursday over the subway incident.
Officers evacuated the address and alerted Devon and Cornwall Police.
Phil Smith, 62, was refereeing a football match at a park around 400 yards from Tudor Road when police cleared the pitch.
A spokesman for the Met said counter-terror officers were now dealing with the item alongside Devon and Cornwall Police.
A member of staff said: "We haven't got a clue what's going on, police haven't given us any information at the moment but they're not letting anyone through the cordon".
In a statement, Devon and Cornwall Police said: "Further forensic searches will continue at the property in question".
Police have not released details about the two items nor have they said whether the first, which was made safe by a controlled explosion, was a viable explosive device.
Parts of East Street, George Street and Tudor Road were closed and residents were initially evacuated to Wolborough Hill primary school.
They are working on the theory that it may have been an improvised explosive device, White said.