Officials in Iraq announced on Sunday that "highly dangerous" radioactive material which went missing last year in November has been found abandoned near a petrol station in the southern town of Zubair.
It had been feared that the DAESH terrorist organisation may have acquired the material.
When it disappeared in November an unnamed senior official said, "We are afraid the radioactive element will fall into the hands of DAESH."
"They could simply attach it to explosives to make a dirty bomb."
The item was stolen from a storage facility near Basra belonging to a US oilfield services company named Weatherford.
According the Iraqi officials, the material - which produces gamma rays used to test flaws in materials used for oil and gas pipelines via industrial gamma radiography - was recovered by radiation prevention specialists.
"A passer-by found the radioactive device dumped in Zubair and immediately informed security forces which went with a special radiation prevention team and retrieved the device," said the chief of the security panel within Basra's provincial council, Jabbar al-Saidi.
"After initial checking I can confirm the device is intact 100 percent and there is absolutely no concern of radiation."
The International Atomic Energy Agency (IAEA) classified the material as Category 2 radioactive, which means it could cause permanent injury to a person in close proximity to it for minutes or hours and could be fatal to someone exposed to it for a period of hours to days.
It is not yet clear how the device owned by Swiss inspections group SGS arrived in Zubair.
A security official close to the investigation said, "After failing to take it out of the town, the perpetrators decided to dump it."
"I assure you it is only a matter of time before we arrest those who stole the radioactive device."
SGS and Weatherford have denied responsibility for the device going missing.