According to reports, al-Qaeda's Yemen-based branch had planned to hand over the bomb to a suicide bomber, who would then blow up a US-bound airline or any other flight heading towards Western countries.
"As a result of close cooperation with our security and intelligence partners overseas, an Improvised Explosive Device (IED) designed to carry out a terrorist attack has been seized abroad," the Federal Bureau of Investigation (FBI) said in a statement.
According to the White House, the President was alerted about it and has since been receiving regular updates on the same.
The device was confiscated within the last 10 days, said an official.
"While the President was assured that the device did not pose a threat to the public, he directed the Department of Homeland Security and law enforcement and intelligence agencies to take whatever steps necessary to guard against this type of attack," said Caitlin Hayden, Deputy Spokesperson of National Security Council.
He disclosed that President Barrack Obama had thanked the persons concerned for their "outstanding" efforts in unearthing the plot.
"The disruption of this IED plot underscores the necessity of remaining vigilant against terrorism here and abroad," said Hayden.
"Initial exploitation indicates that the device is very similar to IEDs that have been used previously by al-Qaeda in the Arabian Peninsula (AQAP) in attempted terrorist attacks, including against aircraft and for targeted assassinations," added the FBI in its statement.