The Army says workers at the Anniston chemical weapons incinerator found mustard gas leaking from a 105 millimeter artillery shell.
According to Michael Abrams, a spokesman, state environmental officials and emergency management agencies in surrounding counties were notified Tuesday.
In a statement, Abrams said the projectile will be placed in a steel container later this week.
Mustard agent is a banned, carcinogenic liquid that blisters the eyes, skin and lungs.
Nearly 1,000 leaking munitions have been safely sealed since 1982. The chemical munitions are stored in earthen igloos.
The Army said the chemical weapons storage and incineration project are scheduled to end in 2010.