Five homemade bombs were discovered in a condominium unit in Selangor following a police raid, prompting the evacuation of nearly 200 residents living in the block.
The improvised explosive devices were later detonated at a nearby quarry in an incident that officials said was related to gangsters rather than terrorists.
Deputy Prime Minister and Home Minister Zahid Hamidi said the raid by the police special operations unit followed complaints about illegal activities occurring in the condo unit.
The residents were allowed to return to their homes just after midday.
"National security is completely under control, and while police have yet to establish a motive, we have traced a few possibilities, none of which is linked to the IS," The Star reported Datuk Seri Zahid as saying. IS refers to the Islamic State in Iraq and Syria (ISIS).
Police counter-terrorism chief Ayob Khan Mydin Pitchay told The Straits Times that the latest raid was not related to terrorism but involved gangsters. "This involves the local illegal moneylenders, the ah longs," said Datuk Ayob Khan.
Two Malaysians who were renting the 17th-floor unit in the residential area of Damansara Perdana fled when they realised the police presence at 4.30am, according to Bernama news agency.
'Low crime rate in neighbourhood'
Metropolitan Square, which comprises both residential and commercial units, is located in the middle-class suburb of Damansara Perdana, which has a vibrant expatriate community.
The mixed-use development has six blocks and is located less than 1km away from a popular Ikea store.
A room can be rented for about RM650 (S$225) while a three-bedroom unit sells for at least RM600,000.
Most of those living in Metropolitan Square are locals but there are some residents from the Middle East, Africa and South Korea.
Residents say the crime rate in the neighbourhood is low and that there is a good mix of locals and expatriates living in the area.
"Police combed the condominium unit and found the bombs, electric circuit materials and substances used to make bombs," district police official-in-charge Mohd Zani Che Din said, according to Bernama.
Other items included PVC pipes, coal powder, wires and remote detonators, as well as a box of drugs.
Residents were told to leave the 23-storey block at 8.30am, while the police later took a statement from the unit's owner.
Mr Michael Lai, who lives in Metropolitan Square, the condowhere the bombs were found, said the neighbourhood is not known for illicit activities. "This can happen anywhere. As long as it's not terrorism, it's all right," he told The Straits Times, adding that he has not felt the area to be unsafe.
The Malaysian authorities have tightened security following terrorist threats arising from the spread of ISIS to South-east Asia. A previous bomb scare in Kuala Lumpur turned out to be a false alarm.