The radiography device disappeared on August 10 as it was transported outside the capital Kuala Lumpur, the New Straits Times newspaper reported.

Authorities fear the device, which contains the radioactive isotope iridium-192 and, could fall into the hands of militants and be used to make a dirty bomb, the paper said.

Local police chief Mazlan Mansor told AFP an investigation had been launched without giving further details.

Deputy Home Minister Azis Jamman confirmed the incident had taken place but insisted "everything is under control".

"There is nothing to be worried about at this moment," he was cited as saying in The Star newspaper.

The company that owned the device -- which weighed 23 kilograms (50 pounds), and consisted of a large metal tube with a handle on top -- reportedly used it to detect cracks in metal as part of inspection protocols in the energy, power and transportation sectors.

It was lost as it was transported to the company's office from the town of Seremban.

Police initially detained two technicians who had been transporting the device, and reported it missing, reports said.

However the pair were later released after investigations failed to link them to its disappearance.