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City Police Officer (CPO) Rawalpindi Mohammad Ahsan Younas said that it was apparently a hand grenade attack in the Ganj Mandi area of the city.
Rescue officials said that 25 people were injured. They said 22 injured were shifted to the District Headquarters Hospital, while three others were provided first aid on the spot.
Police and security forces immediately reached the site after the explosion and cordoned off the area and launched a search operation.
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It was the second attack near a police station in 10 days after one person was killed and seven others injured in a blast near Pir Wadhai police station on December 4.