Army Technical Officers are at the scene in Windsor Avenue not far from Lurgan Golf Club and Brownlow House.
Contractors working for NIE said a member of their staff discovered the suspect device shortly before 10am this morning.
The road from Brownlow House to the Golf Club is sealed off.
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However it is understood access to the Golf Club can be gained via the Antrim Road.
Police said: “Police in Lurgan are at the scene of a suspect package in the Windsor Avenue area.
“ATO are in attendance. A number of homes have been evacuated,” said a spokesperson.