Swimmers were told to leave the waters of West Bay off Bridport just before 5 p.m. Sunday after the discovery.
Parents have been asked to get their children out of the water.
Rescuers initially replaced a yellow and red flag indicating a safe swimming area with a red flag on an area near the harbor wall on the beach.
According to a beach visitor, a Tannoy announcement stated: “This is an announcement from the RNLI. You may have noticed that we have put out a red flag on the beach.
“This is due to an unidentified sharp object in the water.
“If you want to keep swimming, please go to the beach and stay away from the flag area.”
Minutes later, red flags were posted across the beach and lifeguards told swimmers and visitors not to enter the water.
A red flag is described by the Royal Navy as “Danger! Under no circumstances enter the water when the red flag is flying.”
A further announcement added: “We are red flagging the entire beach due to an unidentified sharp object. We strongly recommend that you do not swim at this time”
It is said that people looked “pretty grumpy” after visitors were told not to enter the water.
This includes people paddle boarding, swimming or paddling in the water.
Some people are said to defy command and yet go into the water.
A lifeguard later confirmed it was a “metal object”.
Imogen McGuckin, who frequents the beach, told Dorset Live: “Swimmers were scattered along West Bay beach, from the pier to the cliffs, when an RNLI spokesperson made an announcement through a loudspeaker. He said: “This is a RNLI announcement. You may have noticed that we have raised a red flag on the beach. This is due to an unidentified sharp object in the water.
“If you want to keep swimming, please go to the beach and stay away from the flag area.”
Some of the swimmers looked a little concerned and anyone near the flag returned to the beach or continued up the coast. Mothers were heard to warn their children to avoid the area.