They said it was a very complex and sophisticated device, deliberately designed to maim and kill.
No group has claimed the attack but police believe dissident republicans are behind it.
The bomb was planted at a house in Ballyarnett village on Monday night.
Det Ch Insp Una Jennings from the Police Service of Northern Ireland serious crime branch said that shortly before midnight police received a bogus call about a burglary at a house in Ballyarnett.
"We checked with neighbours. They reported that there was no burglary in progress at the address.
"There were, however, a number of calls placed to local organisations and community representatives in Derry which alleged that there was a bomb left at this address," she said.
"This sequence of events caused police to consider that this was a lure to draw officers into the area for a deliberate attack on them.
"The device that was left was very complex and quite a sophisticated device and left in a manner that was deliberately designed to maim and kill."
Det Ch Insp Jennings said she was disgusted by the attack.
"My reaction to it is one of disgust and horror. What I would say though is that the key to this investigation lies within the local community here in the north west and I would ask that the community come forward to the police," she said.
"We are here and ready to listen. We understand how difficult it can be to have the courage to come forward with information. However, I believe we collectively have a legal and moral obligation to try and help identify those responsible.
"They are ruthless, dangerous people who have no regard for the community here in Derry and who, given the chance, would have been responsible for a murder here in the city last night.
"At this stage we are not aware of any claims being made by anyone who left the device, a line of enquiry is however that dissident republicans were behind it."
Police have said that a bomb found during a security alert in Derry was intended to "lure officers to their death".