A tweet from the PSNI said: 'Police are in attendance at the scene of an incident in Derry/Londonderry city centre. There were no casualties.
The attack came shortly after 8pm on Saturday when a vehicle exploded on Bishop Street. Locals reported hearing one and possibly a second loud bang.
A police forensics team was examining the scene on Sunday, with cordons sealing off access to the charred wreckage of the vehicle.
"These are by their very nature, inherently unstable devices, and history tells us that they can detonate prematurely, whilst being assembled or transported".
"This incident has shocked the local community".
He continued: "The people responsible for this attack have shown no regard for the community or local businesses".
"Fortunately it didn't kill anybody and it didn't cause widespread damage", ACC Hamilton continued. "This bears all the hallmarks of a dissident Republican bombing".
A vehicle bomb attack on a Londonderry court house has been condemned by police as "unbelievably reckless".
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"It achieves nothing, it didn't achieve anything in the past, it didn't achieve anything right now".
Northern Ireland Secretary of State Karen Bradley has said those behind the bomb attack will not prevail.
"Our voices across the political spectrum are united".
"The New IRA, like most dissident republican groups in Northern Ireland, are small, largely unrepresentative, and just determined to drag people back to somewhere they don't want to be", he said.
The Republic of Ireland's deputy premier Simon Coveney tweeted his disgust at the incident.
Sinn Fein Foyle MP Elisha McCallion has condemned the explosion. Derry is a city moving forward and no one wants this type of incident. "It is not representative of the city", the parliamentarian said in a statement.
A bomb warning phone call was made to the West Midlands Samaritans who then informed West Midlands Police who in turn passed the information to the PSNI.
Hamilton said the "main line of inquiry" was that the bomb had been planted by a group known as the New IRA. Monday is also the 100th anniversary of the first meeting of the Dáil, a breakaway parliament set up by Irish MPs who shunned Westminster.