No one was injured in the blast, which was heard across large parts of central Malmö shortly after 1.30am on Monday.
Babel, a popular nightclub and concert venue in the Möllevången area, was damaged in the explosion, which shattered windows on the first floor. A car parked on the street outside was also damaged.
Police examined the property overnight. The explosion is believed to have been intentional, but in the morning it was still unclear what had caused the detonation.
“It's not a New Year's rocket exactly, but obviously something more powerful,” police spokesperson Kim Hild told regional newspaper Sydsvenskan.
As The Local has previously reported, while Sweden is generally a peaceful, safe country with low crime rates, police have had difficulty addressing violence in its third-biggest city.
In recent years, there have been grenade attacks, shootings and incidents of car arson.
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