First Bus vehicles were used to transport patients from Chapel Allerton Hospital to the nearby Scott Hall Leisure Centre after police were called shortly before 3pm.
There was a heavy police presence with armed officers on the scene and a bomb disposal unit on route before the incident came to a close after 5pm.
A Leeds Teaching Hospitals NHS Trust spokesperson: "We are relieved to confirm the suspect package at Chapel Allerton Hospital has been declared safe and staff & patients are now returning.
"Huge thanks to our police and military colleagues who responded so quickly to bring the incident at Chapel Allerton Hospital to a close.
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"Apologies to patients & visitors caught up in the evacuation of Chapel Allerton Hospital. It was important to act fast on a credible threat.
"We're very proud of the prompt and professional response of our fantastic team at Chapel Allerton Hospital & colleagues across LTHT today."
Police also confirmed that the situation was dealt with.
Earlier, a West Yorkshire Police spokesperson had said: "At 2.57pm today, police received a report of suspect package in a toilet at Chapel Allerton Hospital.
"A cordon has been put in place and the hospital has carried out a partial evacuation while the package is examined."
It is not yet known how many patients were affected, but it understood that wards one, two and three were evacuated.
The hospital does not have an A&E department and is mainly used for outpatients, but surgery is carried out there.
Chapeltown Road remained open to traffic.