The death toll could include one or two attackers, Health Minister Mehmet Muezzinoglu said.
Scores of police cars, firefighters and medical personnel rushed to the scene. Security forces evacuated the area, the official Turkish news agency Anadolu reported
"We condemn this terror attack. ... People who carried out this attack will never succeed," Interior Minister Efkan Ala said. "Turkey will overcome. Our determination to fight against terror will never be deterred by attacks like this."
President Recep Tayyip Erdogan blamed regional instability for the violence.
"When terror organizations and the ones who use them as a tool start losing their fight against the security forces," he said, "they apply the most cruel methods and target our innocent people."
Authorities haven't released details about who they believe was behind the blast.
"It's too early to talk about who carried out this attack. The investigation is ongoing," a senior Turkish official said. "Our priority right now is the wounded."
The explosion apparently targeted a transportation hub where bus stops and a metro station are located in the Kizilay neighborhood, Anadolu said.
A bombing that targeted military vehicles in the capital in February killed at least 28 people.
Last week, the U.S. Embassy in Ankara warned of a possible terrorist plot to strike government buildings in the capital's Bahcelievler neighborhood, which is just a few minute's drive from the square where Sunday's explosion occurred.