“An explosive-laden car went off near a compound of a local construction company in Barmal district in Paktika province late on Sunday,” a TV correspondent quoted spokesman for provincial administration Mukhlis Afghan as saying on Monday.
The spokesperson further added that the majority of those killed in the terror attack were local workers.
More than 50 people were also injured in the explosion. Many of the wounded are said to be in critical conditions in hospital.
Taliban militants have claimed responsibility for the attack.
Taliban spokesman Zabiullah Mujahid claimed in a phone call from an undisclosed location that the bomber was a man from Kabul and his car was packed with 1,650 pounds of explosives.
The bomb attack comes a day after more than 10 Taliban militants lost their lives in a US-led airstrike in Barmal district.
Paktika, located some 155 kilometers (96 miles) southeast of the Afghan capital city of Kabul, and neighboring Khost province have recently seen an escalation of militant attacks over the past months.