There were no casualties and all divers were outside the danger zone when the explosion took place. Video from the scene showed an enormous explosion which threw a torrent of water into the air.
The huge Tallboy bomb, dropped by the British Royal Air Force, was found in the Piast Canal near the town of Swinoujscie.
In total it weighted just under 5,400kg including about 2,400kg of explosives.
Some 750 people were evacuated from the surrounding area before the explosion took place.
Speaking to Polish news agency PAP Lieutenant Grzegorz Lewandowski, spokesman for the 8th Coastal Defense Flotilla, confirmed the site is now safe.
He said: “The deflagration process turned into detonation.
“The object can be considered as neutralised, it will not pose any more threat.
“All mine divers were outside the danger zone.”
Swinoujscie is home to a liquid natural gas terminal but this did not suffer any damage in the explosion.
However, on 16 April 18 Lancaster bombers, armed with Tallboy bombs, targeted the cruiser.
They scored one direct hit on the Lutzow, as well as several close misses, causing her to sink.
It is unknown which of the three attacks the bomb that exploded was related to.
Despite sinking Lutzow’s main deck remained above the waterline and she was used as a floating gun battery against Soviet troops as they advanced towards Germany.
She was later raised by the Soviet navy, then sunk as target practice in July 1947.
The Tallboy bomb was designed by Barnes Wallis, most famous for invention the ‘bouncing bombs’ using in the Dambusters raid, as a weapon to be used against German ships and heavy fortifications.
Its size meant it could only be carried by a specially modified version of the Lancaster bomber.
Most notably in November 1944 the German battleship Tirpitz was hit by three Tallboy bombs and sank, killing at least 940 sailors.
Poland was invaded by Germany in September 1939 causing Britain and France to declare war.
A couple of weeks later the Soviet Union also invaded from the east.
Poland spent most of the war under Nazi control before being occupied by Soviet troops, who installed a pro-Moscow communist government.