Lahore police chief Capt (R) Amin Wains said the "target of blast was police".
He also confirmed that it was a suicide blast.
According to Rescue 1122, at least 20 people including policemen have been killed in the blast.
"Police and Lahore Development Authority officials were busy in removing encroachments outside the Arfa Karim Tower, located near the CM's Model Town residence, when a powerful blast took place," Rescue 1122 Deeba Shahnaz told PTI.
Emergency was declared in city hospitals.
"The condition of several injures is stated to be critical" the official said.
The chief minister, who is also the brother of Prime Minister Nawaz Sharif, was in a meeting at his Model Town office when the blast took place.
Citing police sources, the Geo News reported that a suicide attacker targeted police personnel deployed at the site. The area has been cordoned off by a heavy contingent of security forces and the section of the road has been sealed.
In April, six persons were killed and 15 others injured when a suicide bomber targeted a population census team in Lahore's Bedian Road.
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