According to the local security officials quoted by the local media, the incident took place this afternoon in the vicinity of Ferozpur road.
The officials are saying that the blast ripped through a vegetable market and was apparently carried out by a suicide bomber.
At least twenty six people have reportedly been killed and around fifty eight others have been wounded, the officials said, adding that some security personnel are also among those killed or wounded.
No group or individual has so far claimed responsibility behind the incident.
Rescue services quoted by the local media had earlier confirmed the death of at least 15 people so far and at least twenty others have sustained injuries.
This comes at least eight people were killed and dozens more were wounded in a similar explosion in Lahore city late in the month of February this year.