According to the security officials, the incident took place at around 6:30 pm local time in the vicinity of the first police district of the city.
The ministry of interior spokesman Najib Danish confirmed the incident and said a magnetic mine went off in Chendawol area of the city.
He said at least three people including a civilian and three policemen lost their lives in the explosion.
Danish further added that sixteen others including two policemen and fourteen civilians sustained injuries.
According to Danish, the incident took place after a magnetic bomb planted in a vehicle of the police forces went off, setting the vehicle ablaze.
No individual or group has so far claimed responsibility behind the incident.
This comes as a coordinated rocket attack rocked Kabul city on Wednesday after a group of insurgents launched an attack o Hamid Karzai international airport.
According to the security officials, at least one civilian was killed and eleven others were wounded in the attack.
The Taliban group claimed responsibility behind the attack and said the target was the US secretary of defense James Mattis who arrived to Kabul city earlier that day.