Napier Museum also temporarily closed its doors earlier this month when a bottle of picric acid was found in a 1900s medical chest amongst a colourful display of old-fashioned medicine bottles.
Nelson City Council group manager community services Andrew White said picric acid in any of Founders Museum's collections represented an unacceptable level of risk.
"... We're working as swiftly as we can to identify and remove any hazardous items safely and appropriately."
Members of the NZ Defence Force's EOD remove picric acid from the museum before disposing of it off site. The building was evacuated while it was carried out, but re-opened the following day.
A Defence Force spokesperson said the EOD had already responded to five call outs to safely dispose of picric acid this year and warned there could be more.
"A number of museums are now reviewing their holdings to ensure the safety of their staff and the public. It is possible that historical holdings will continue to be identified as this process occurs."
The picric acid was found in a mix of small glass vials, small tins and medical Lint bandages.
A Police media spokesperson said Police were called to help keeping people out of the area while the EOD did their job.
Picnic acid is a pale yellow, toxic substance which becomes flammable when dry or the water content is below 30 per cent. Dry picric acid is sensitive to heat, shock and friction.
It is used as a military explosive, but in the early 1900s was also used as a dye and an antiseptic. Picric acid can be used in the production of matches and electric batteries.
Picric acid is toxic if swallowed, inhaled or absorbed through the skin and could cause lung, liver or kidney damage. It can also cause skin irritations.
What to do if you find items which contain or are suspected to contain picric acid:
1. Do not touch or attempt to move the item.
2. Evacuate and isolate the area where the item is displayed, or stored, to prevent inadvertent access to the item.
3. Contact the NZ Police.
Source: NZDF