Tomonori Iso, 40, stole a metal container holding a sealed, two-millimetre (0.08-inch) cylindrical bit of iridium 192 from a branch of a company where he was a subcontractor, police said.
"Iso has said he held a grudge against either his own company or the contractor," said a police spokesman in Ichihara, southeast of Tokyo.
Iso broke the container into two parts and threw them into the water as he did not know what to do with them, the spokesman said.
The pieces were retrieved on Thursday in the river bed and a port in Yokohama, where Iso worked, he said.
"The iridium appears to have had no impact on the environment or human health," he said, citing experts from the science ministry.
"In the water, the iridium bit was as tightly sealed as if it were in concrete," he added.
Iridium 192 is commonly used in cancer radiation treatment, but prolonged exposure can cause sickness.
A security camera caught Iso on April 5 in a baseball cap and work tunic hauling away a 22-kilogram (48-pound) inspection device that held the radioactive material.
Its disappearance led authorities to issue an alert warning the public not to go near the substance if found.
Iso was held on charges of theft and trespassing. Police were still investigating his motive.
He worked as a subcontractor for a branch of Non-Destructive Inspection, a company based in the western city of Osaka that uses devices such as iridium 192 to check for damage and defects in products without destroying them.