The package - which was delivered by courier to a pharmacy on the same street as the market - was later destroyed in a controlled explosion.
The police said earlier on Twitter that "the suspicion of an improvised explosive device has been confirmed".
Local media reports that the package was delivered to a pharmacy but was reported as suspicious when an employee found wires inside.
Later in the day, police said the cylindrical object contained nails, wires and batteries but no detonator.
Image The police were called around 2.30pm local time on Friday
German authorities were already on high alert for an attack on one of the country's famous Christmas markets after 12 people were killed in Berlin previous year.
Police raids in four different cities last month resulted in the arrests of six Syrian nationals, who are suspected of plotting a terror strike on another Christmas market.
In that case, a Tunisian man hijacked a truck and drove it into a crowded market, killing 12 people in an attack that was later claimed by the Islamic State group.
Security measures were in the spotlight as Berlin's Christmas markets officially opened on Monday.
Karl-Heinz Schroeter, interior minister of the state of Brandenburg, which surrounds Berlin, said the area would remain shut while police searched with sniffer dogs for any other similar packages.