Australia's Department of Foreign Affairs and Trade (DFAT) building in Canberra has been cleared after receiving a suspicious package, which the later deemed safe.

Federal police had dispatched bomb squads to the building which is in the parliament zone while the evacuations were being made.

Alarm bells were ringing while the streets around the building were cordoned off.

Following a two-hour drama, the ACT Policing said: "Package found at DFAT deemed non-suspicious. We will always respond in this manner to suspicious packages, no matter where they are identified or located."

Earlier, the police said in a statement: "ACT Policing is investigating a suspicious package located in the canteen area of the Department of Foreign Affairs and Trade. ACT Policing provided a coordinated response and cordoned the area as a standard safety precaution."

"Evacuations are under way at DFAT and road closures implemented. Members of the AFP Bomb Response Team are in attendance."