"There will also be disruption to inbound and outbound flights during the operation".
The Metropolitan Police established a 700-foot exclusion zone where all properties inside have been ordered to evacuate.
Authorities said bomb specialists and the Royal Navy have confirmed the device is a German undetonated explosive and are working on removing it safely.
The airport has advised all passengers not to travel to the airport and to contact their airline for further information.
In a statement, the council said: "Officers are assisting with a controlled evacuation of people in this exclusion area".
London City Airport apologized to travelers unable to board any of its 261 flights affected by the bomb.
Commuters attempting to get to work this morning are also facing delays after Docklands Light Railway services between Pontoon Dock and Woolwich Arsenal were also suspended.
The Royal Navy is taking precautionary steps to ensure that the bomb is "as safe as possible" before they attempt to remove it from the River Thames and tow it away.
Unexploded World War Two bombs are occasionally found in the United Kingdom and their discovery triggers a military response.
London was heavily bombed during the "Blitz", the Nazi German air attacks of September 1940 to May 1941.
Robert Sinclair, CEO of London City Airport, said in a Tweet by the airport, "The World War Two ordnance discovered in King George V Dock has been safely removed by the Royal Navy and Met Police". According to The Associated Press, "regional airline City Jet said its flights from the airport had been rescheduled to land and take off from London Southend airport", and "Italy's Alitalia said it would operate flights from London Stansted airport".