Image: Channel Nine News

An explosion near Port Stephens is believed to have been sparked by an old military device.

About 10pm Monday night emergency services were called to a home on Morna Point Road at Anna Bay where they found a 37-year-old man and a four-year-old girl suffering shrapnel wounds from a blast.

#BREAKING: A young girl and a man in his 40s have been taken to hospital after an explosion at Port Stephens. #9Today pic.twitter.com/9h4aZjvQGV

— The Today Show (@TheTodayShow) September 24, 2018

Initial investigations suggest it was a military item that exploded.

The injured pair had found the item while fossicking on a beach that was once part of a World War Two military range.

They were treated at the scene by paramedics before being taken to John Hunter Hospital in a serious but stable condition.

Inspector Alan Janson says it’s a reminder not to handle military ordnance and to instead call police or the nearest military base.

Police have been working with specialist personnel from the Australian Defence Force overnight, and a number of items were removed from the home and rendered safe.