The explosion occurred at a parking lot on Rönnblomsgatan just after 4:30 am. A person delivering newspapers in the area heard the bang and was one of the people who notified the police.
Police have found pieces of a hand grenade at the site, and the bomb squad has been there to investigate further. The hand grenade looks to have exploded on a van, according to information received by news agency TT.
Police will be trying to determine whether any of the vehicle owners are threatened or have connections to the criminal world.
The explosion this morning is just one of many that have hit Sweden's southern city of Malmö recently. Several of the cases have involved hand grenades, but according to the police, this explosion is different from previous explosions, which have happened in other areas and have often targeted authority buildings.
Private homes, businesses and authorities are all located in the area where the hand grenade detonated this morning, and the target of the explosion is still unclear, according to the police.
Nobody was injured in the blast.