The blast occurred in the Defence Housing Authority (DHA) Y-Block area of the city.
"The blast took place inside an under-construction building with DIG operations Haider Ashraf stating that labourers were present inside when the explosion took place," Geo News reported.
Following the blast, an entire floor of the building collapsed.
According to reports, four cars and 12 motorcycles were also damaged in the blast.
The incident left 21 people injured. They were sent to a nearby hospital for treatment.