The regional environmental protection agency ARPAV collected samples of the colored water with the help of the fire department, they added. The agency's experts are now probing for the cause of the change in color.
The Interior Ministry's representative in Venice, Michele di Bari, has called an emergency meeting to devise possible countermeasures, Italy's ANSA news agency said.
The change in color, according to to preliminary probes by ARPAV and the police, was caused by a type of dye often used to trace water leaks, ANSA reported.
Police said that the liquid did not pose a threat to the health of local residents, according to the agency.
The bright green area stretched from the Rialto Bridge to part of the Grand Canal. The head of the Veneto region, Luca Zaia, said on Twitter that the green color was first reported by local residents.
Police said that they were investigating the incident.
No person or group immediately claimed responsibility for the Grand Canal turning green. Last weekend, however, an environmentalist group used vegetable charcoal to turn the waters of the Trevi fountain in Rome black to protest the government's climate policies.
The latest incident also sparked comparisons with an event in 1968, Argentine artist Nicolas Garcia Uriburu dyed the waters of the city's Grand Canal green in order to promote ecological awareness during the Venice Biennale.