U.S. officials told The Wall Street Journal the device was to have been used in a suicide attack by al-Qaida's Yemeni branch, in an upgraded version of the failed underwear bomb incident over Detroit on Christmas Day 2009.
"There was a terrorist explosive device recovered," a U.S. counterterrorism official told the Journal. "It was intended for use by a suicide bomber on an airline."
A U.S. official told CNN al-Qaida in the Arabian Peninsula was responsible for the plot.
"We believe AQAP produced the device, and we believe it was intended to be used by a suicide bomber on an aircraft," the official said. "The device and the plot are consistent with what we know about AQAP's plans, intentions, and capabilities. They remain committed to striking targets in Yemen, Saudi Arabia, the Homeland, and Europe."
No arrests were reported and there was no indication as to when or where the device was retrieved.
Senior Yemeni officials disavowed any knowledge of the suicide plot, though they stopped short of denying the account from U.S. authorities, the Yemen Post reported. Officials the newspaper contacted in Yemen's Interior, Defense Ministry, presidential office and prime minister's office said they had no information about the case.
President Barack Obama has been updated regularly since being informed of the plot in April, the White House said Monday.
"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," National Security Council spokeswoman Caitlin Hayden said.
"The disruption of this IED [improvised explosive device] plot underscores the necessity of remaining vigilant against terrorism here and abroad."
The FBI said the device was being analyzed and the Journal said officials described it as "very similar" to devices used previously by Yemeni al-Qaida operatives.
"The device never presented a threat to public safety, and the U.S. government is working closely with international partners to address associated concerns with the device," an FBI statement said.
Homeland Security Department spokesman Matt Chandler issued a statement saying the department was monitoring efforts by terrorist groups intent on attacking the United States, but had "no specific, credible information" about an active plot "at this time," CNN reported.
"Since this IED demonstrates our adversaries' interest in targeting the aviation sector, DHS continues, at the direction of the president, to employ a risk-based, layered approach to ensure the security of the traveling public," the statement said.
"These layers include threat and vulnerability analysis, pre-screening and screening of passengers, using the best available technology, random searches at airports, federal air marshal coverage and additional security measures both seen and unseen."
"DHS will continue to work with our federal, state, local, international and private sector partners to identify potential threats and take appropriate protective measures. As always, we encourage law enforcement and security officials, as well as the general public, to maintain vigilance and report suspicious activity to the appropriate authorities."
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