Colombian police retrieved the object which fell onto land in the central Tolima province on Sunday and took it away for examination.
Farmers in the remote area spoke of being terrified fearing the object was an alien UFO crash landing in a field.
One resident of San Luis said: “It was smoking and a strange liquid was leaking from it.”
Locals told the El Tiempo newspaper: “We all thought it was a UFO or the remains of a spacecraft.”
But, police later confirmed it was actually the remains of a specialist balloon used by X, a company founded by Google, to boost the internet signal strength in remote areas.
Jorge Esguerra, the Tolima police commander, said speculation it was a satellite had also been mistaken.
He said: “It’s a technological device used by Google which moves around and is held aloft by a balloon.”
It was part of X’s Project Loon, previously known as Google X, which uses the balloons drifting through inner space to improve internet services.
During a test flight of one of the balloons over a tea plantation in Sri Lanka in February 2016, another one was grounded.
It is not yet known what caused the latest crash.