Hamilton described how a pizza delivery driver was hijacked on Saturday evening and his auto was packed with explosives before being left outside the court house on Bishop Street in Derry.
Police block the entrance to the scene of a suspected auto bomb in Londonderry, Northern Ireland, on January 20, 2019.
Police said the van had been hijacked by three masked men who threw an object in the back before abandoning it on a residential street. No one was injured.
Police said this morning a fifth man had been arrested in connection with the bomb.
"Our main line of inquiry is against the New IRA", said Police Service of Northern Ireland assistant chief constable Mark Hamilton.
"We are now putting in place cordons in the area, and we anticipate significant disruption to the local community while we work to the make the scene safe".
"Perpetrated by people with no regard for life", she added.
Sky News' senior Ireland correspondent David Blevins said the sound "would have been hauntingly familiar to people in the city", which is just two miles from the border with Ireland.
"Fortunately it didn't kill anybody but clearly it was a very significant attempt to kill people here in this community", he said. The nationalist fight was spearheaded by the Irish Republican Army (IRA).
"The device detonated at 8.10pm".
The two occupants in the van were ordered to drive the vehicle to the Lonemoor Road and leave it there.
"Thankfully, the local community and the police service acted bravely together and we got everybody away just in time", Hamilton said.
No-one was injured in the attack, which has been condemned as "unbelievably reckless".
Sinn Fein Foyle MP Elisha McCallion has condemned the explosion.
The PSNI's Assistant Chief Constable has said that no links have been uncovered to connect the recent incidents in Derry to either Brexit or the centenary of the beginning of the War of Independence.
There were no details from police on who may have been behind the hijackings in Londonderry, also known as Derry, particularly among Catholics to show their resistance to British rule.
"Derry is a city moving forward and no-one wants this type of incident", she said.
For many years, Northern Ireland has been split over the question of whether it should remain part of the United Kingdom or become part of Ireland.
Northern Ireland Secretary Karen Bradley told MPs that the weekend bomb blast on Bishop Street, which caused no injuries, had "absolutely nothing to do with Brexit".