It began after a lorry was hijacked in the city.
Two masked men approached the driver as he was making a delivery to Ederowen Park in the Galliagh area at about 12:30 BST.
An object was loaded into the back of the lorry and the driver was ordered to take it to Strand Road police station. The police have now declared it a hoax.
The lorry stopped at Buncrana Road. Staff were advised to leave St Columb's College in Derry.
People were also moved from business units in the Springtown Industrial Estate.
Chief Inspector Tony Callaghan, the Foyle Area Commander, condemned those behind the alert.
"This security alert caused a great deal of inconvenience to the people of Derry, including those who work in businesses close to the scene and also those who travel along Buncrana Road and Springtown Road, both of which are major arterial routes," he said.
"However, we must all remember that despite the major inconvenience caused, this was undoubtedly a frightening experience for the lorry driver.
"Today a man was going about his normal day-to-day work when he was confronted by masked men and ordered to drive with what he was told was a bomb to the police station.
"It is the people of the city who bear the brunt of the inconvenience and any potential destruction, so we would appeal for everyone's help in showing the perpetrators that this is not what anyone wants for the city."
A security alert on the Buncrana Road in Londonderry has ended.