The explosion occurred near a mosque where people were gathering to celebrate Eid-e-Milad-un-Nabi, the birthday of Islam's Prophet Muhammad, Mastung Assistant Commissioner Atta-ul-Muneem Baloch told Xinhua.
He said the condition of several victims was critical, adding that a state of emergency had been imposed and all medical staff of the hospital had been called in.
Following the blast, police cordoned off the area and launched a search operation to arrest the culprits.
An investigation into the incident has been kicked off to determine the nature of the blast, police said.