It said the suspicious substance will be sent to a laboratory for analysis.
"Until the results are received and a determination is made that the substance does not pose health or safety risks, the embassy will be closed to the public," it said.
The embassy's consular section will remain available to provide emergency services to American citizens during the closure.
American citizens needing emergency assistance can call 94-11-249-8686 during regular business hours or the duty officer on 249-8500 after hours, the embassy said.
The scare involving a 'suspicious powder' was the latest to affect Western embassies and institutions after the emergence of the Al Qaeda threat.
Previous scares have turned out to be false alarms.
The US and other Western governments have said they fear Islamic Al Qaeda militants might use chemical or biological weapons in atta