Chief Superintendent Stephen Martin said the explosively formed projectile (EFP) could have ripped through an armoured patrol vehicle and killed police officers.
The bomb, which is capable of penetrating armoured vehicles, was found after police stopped a black Renault Megane car in the Westway area of the Creggan at about 8.40pm on Thursday.
Eyewitnesses said officers rammed the vehicle.
Three men in the car were arrested and a fourth man was detained a short distance away.
Security chiefs believe dissident republicans opposed to the peace process were planning an attack in the centre of the city, next year's UK City of Culture.
Mr Martin said: "We believe it was likely intended to be used against police officers in this city."
Earlier this year a similar projectile explosive device was discovered in the Ardoyne area of Belfast.
The discovery was made hours before US secretary of state Hillary Clinton arrived in Belfast.